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Landlords invest in residential property for long term
26.10.05
By Anne Gibson
Auckland landlords are not "get-rich-quick wannabes" but professionals planning to introduce a code of conduct.
So says Andrew King, president of the Auckland Property Investors Association, which has just conducted a survey of its members.
It shows landlords holding their housing portfolios longer than previously thought, continually budgeting for maintenance and property upgrades and increasingly undertaking professional training.
The findings contradict a survey cited in a DTZ Research study released this month, which in turn cited a national landlord survey carried out last year,
The DTZ study portrayed landlords as get-rich-quick merchants. A fifth were in the business a year or less, expected significant capital gains, showed little use of business structures to own or manage their properties, had poor property management systems and discriminated against some groups of people.
"Unlike overseas, New Zealand has little institutional investment in the private rental market and mom and pop investors are the typical landlords," said the DTZ report. "Recent research on New Zealand landlords shows some discouraging trends."
But King said the Auckland survey, of landlords who own nearly $1.6 billion of property, showed a different picture. They have high equity levels and an average of only 50 per cent debt on their portfolio; spend up to $2000 on repairs and maintenance annually; have property management skills and undertake further development; and are investing for the long term.
Last year, 32 per cent of members were women. This year, that has risen to 40 per cent. Although 10 per cent have been investors for a year or less, 12 per cent have invested for more than 15 years.
The association plans a series of professional development training courses, leading to a certificate, next year.
"We can demonstrate our commitment to professionalism and providing good-quality accommodation to tenants by showing this certificate to potential tenants," King said. "There are a few things we are working on, such as a code of conduct, which will also help to enhance our members' reputation as superior landlords."
The average value of association member's individual rental properties is $304,000. They have high equity levels, with only 50 per cent debt on their average portfolio value of $1.5 million, a figure that looks set to rise because 88 per cent are planning to buy more property in the coming year. Only 24 per cent are considering selling.
Their portfolios have increased in value by $715,000 in the past year and each member's net wealth has increased by an average $300,000 in the same time.
Association members spend nearly $1800 a year on each property's repair and maintenance, increasing to more than $2000 when garden maintenance was included.
King said the Tenancy Tribunal handled about 14,500 applications annually from the Auckland region and about 80 per cent were made by landlords against tenants.
Tenants of association landlords were less likely to have their tenants take them to the tribunal, because of the property management skills they learned.
Rent-collectors - is this your landlord?
* In the business 7.5 years on average.
* Serious long-term investors.
* Increasingly likely to be a woman.
* Maintenance spend of $1800 to $2000 annually.
* Most landlords own one to two places.
News source
26.10.05
By Anne Gibson
Auckland landlords are not "get-rich-quick wannabes" but professionals planning to introduce a code of conduct.
So says Andrew King, president of the Auckland Property Investors Association, which has just conducted a survey of its members.
It shows landlords holding their housing portfolios longer than previously thought, continually budgeting for maintenance and property upgrades and increasingly undertaking professional training.
The findings contradict a survey cited in a DTZ Research study released this month, which in turn cited a national landlord survey carried out last year,
The DTZ study portrayed landlords as get-rich-quick merchants. A fifth were in the business a year or less, expected significant capital gains, showed little use of business structures to own or manage their properties, had poor property management systems and discriminated against some groups of people.
"Unlike overseas, New Zealand has little institutional investment in the private rental market and mom and pop investors are the typical landlords," said the DTZ report. "Recent research on New Zealand landlords shows some discouraging trends."
But King said the Auckland survey, of landlords who own nearly $1.6 billion of property, showed a different picture. They have high equity levels and an average of only 50 per cent debt on their portfolio; spend up to $2000 on repairs and maintenance annually; have property management skills and undertake further development; and are investing for the long term.
Last year, 32 per cent of members were women. This year, that has risen to 40 per cent. Although 10 per cent have been investors for a year or less, 12 per cent have invested for more than 15 years.
The association plans a series of professional development training courses, leading to a certificate, next year.
"We can demonstrate our commitment to professionalism and providing good-quality accommodation to tenants by showing this certificate to potential tenants," King said. "There are a few things we are working on, such as a code of conduct, which will also help to enhance our members' reputation as superior landlords."
The average value of association member's individual rental properties is $304,000. They have high equity levels, with only 50 per cent debt on their average portfolio value of $1.5 million, a figure that looks set to rise because 88 per cent are planning to buy more property in the coming year. Only 24 per cent are considering selling.
Their portfolios have increased in value by $715,000 in the past year and each member's net wealth has increased by an average $300,000 in the same time.
Association members spend nearly $1800 a year on each property's repair and maintenance, increasing to more than $2000 when garden maintenance was included.
King said the Tenancy Tribunal handled about 14,500 applications annually from the Auckland region and about 80 per cent were made by landlords against tenants.
Tenants of association landlords were less likely to have their tenants take them to the tribunal, because of the property management skills they learned.
Rent-collectors - is this your landlord?
* In the business 7.5 years on average.
* Serious long-term investors.
* Increasingly likely to be a woman.
* Maintenance spend of $1800 to $2000 annually.
* Most landlords own one to two places.
News source
Doubled in a year, and that only being an average. Does this make sense?
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