Good evening,
I have been asked to look at your article just published on the Stuff website regarding the Pitfalls of Renting.
I have carefully read the article, and while I will agree that you give some sound advice regarding the recommendations for tenant to take out liability insurance and to ensure that all of the occupants are named on the tenancy agreement, I do sense that the overall tone of the article is very one-sided and somewhat derogatory to Landlords.
During my 22 years as a Residential Landlord I have found that there are good and bad on both sides of the fence.
I have come across tenants from hell and tenants who are excellent in every way.
Similarly, I would agree that there are Landlords who give the business a bad name but also those who work hard to provide secure comfortable housing for their tenants at a fair market price. This is, after all, a business and any business needs satisfied clients.
The ‘Tenancy Support Services’ you refer to in your article is not, despite appearances, anything to do with any Government agency but is a privately run for-profit website set up by some seeming aggrieved individuals who wish to support tenants in their claims against their Landlords. Much of the advice and information in that website has been copied, with only minor alterations, from an American legal website that deals with New York tenancy issues.
(
http://www.mcadamslaw.net/tenantrightsreport.html)
You mention issues such as bonds, rent increases and money-grubbing Landlords.
The rules around bond and rent payments are set by the Government. Landlords have no ability to vary these requirements.
Limiting rent increases to a specific percentage would only work if the same restrictions were placed on increases in Council rates, insurance premiums, maintenance costs and water charges. Given the unregulated greed of Local Authorities, I cannot see this happening.
Landlords, far from being money-grubbing rip-off merchants, are all too frequently caught between rapidly rising costs and increasingly complex Council and Government housing requirements.
For an average $400,000 house, council rates will be around $1400, insurance $750 and adding in other costs like water daily charges, lawnmowing and management fees and you quickly reach $3,000 a year. So the first $60 a week of rent you pay does not even stay with the Landlord.
For the rent the tenant is getting exclusive use of a $400,000 asset. Try borrowing $400,000 from a bank and see how much interest you will pay. Even at 5% that's $20,000 a year. Add in a couple of thousand for maintenance and repairs and you have $25,000 a year or $500 a week.
Any rent less than the $500 a week will then represent a direct subsidy from the Landlord to the Tenant.
Note that $500 does not give the Landlord any profit at all, he may as well put the money in the bank, earn interest, and lie on the beach undisturbed by tenant problems.
That's why rents are rising steeply as a lot of Landlords are realizing this and getting out of the business.
I am sure that the flat vacated by Auckland sound engineer Josh Angel, far from being left vacant after his departure, was rapidly snapped up by other tenants only too keen to get a roof over their heads at a fair market price.
Thank you for your interest in the residential rental business. If you do wish to publish another more balanced article giving the views of those of us on the other side of the fence, I would be happy to assist.
Regards,
Peter Lewis
PropertyTalk.com
Emotive and inflamatory -- shame on you Stuff.co.nz
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