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The next big rort to be exposed: Insulation subsidy

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  • The next big rort to be exposed: Insulation subsidy

    The insulation installing industry has been rorting the government over the insulation subsidy and the media and the politicians seem to be turning a blind eye.
    I have a quote involving the subsidy:
    Full price: $4636.80
    Subsidy: $2318.40 - from the taxpayer and into the insulation installers pocket
    Price to me: $2318.40

    Another quote from an installer who contributes to PropertyTalk:
    No subsidy
    Price to me: $2700

    Not a big difference in price to me between the two quotes.
    So the work is really about $2500 which covers materials and labour.
    The rort is the first quote where the installing company does the work and covers it's costs and makes a profit and then charges the govt $2300 on top.

    If I have made some wrong assumptions then let me know.
    The media seem to be picking on landlords who haven't taken up the subsidy and imply they are being cruel to their tenants.
    Could the media have a close look at the insulation installing companies and check their figures?
    I also wouldn't be surprised if the meth testing scammers have also set up an insulation installing company to develop another income stream based on deceit.

  • #2
    You're spot on. We did the same assessment and found very similar results.

    We went with an independent installer who did a great bulk discount for all our properties.

    Comment


    • #3
      My own experience exposed the Rort - and I wrote about it here and it links to other discussions on the topic too - plus there's the 'similar threads' that follow after this discussion.

      Bob I can not see this going away - I can see it getting worse as time runs out and all the installers see the window for making huge profit close in the coming months.

      It's the same as the 'P' testing - a song and dance from Gov't and out of nowhere there's suddenly lots of 'testers' with zero knowledge or experience making $$ with incorrect and inconsistent readings etc.

      I can see the next one on the horizon too - the heating requirement - 'heat pumps'.

      Back to the insulation caper. Do your research on whether what you have is enough - we got lots of quotes and only one installer said we had adequate insulation in the roof so a top up wasn't required. All the others had $$$ in their eyes and just quoted for the top up. So it all starts with the assessment of what your property needs and doesn't need and then it goes from there on the cost of the product and install etc.

      As it worked out we went with a business that doesn't claim the subsidy and our quotes were from $1800 - $7000. (Yep, $7K).


      cheers,

      Donna
      SEARCH PropertyTalk, About PropertyTalk

      BusinessBlogs - the best business articles are found here

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      • #4
        It made the headlines

        https://www.nzherald.co.nz/business/...ectid=12062882

        Which companies in Auckland would you recommend ?

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        • #5
          Originally posted by donna View Post
          .

          As it worked out we went with a business that doesn't claim the subsidy and our quotes were from $1800 - $7000. (Yep, $7K).
          Donna
          Which business did you go for in the end Donna?

          Comment


          • #6
            My experience has been exactly the same - quotes from installers taking part in the various subsidy programs (the previous one was called "Warm Up NZ" from memory) had the same or higher cost to me than non-subsidy installers.

            For a couple of my units which I insulated a few years ago, I sourced the insulation from East Coast Suspended Ceilings and then paid a local installer to fit it. Even with freight from the north island to Christchurch, it was cheaper than buying the insulation locally (at that time anyway).

            More recently I have used a company in Christchurch called Living House who offered me a great landlord special. The last one was $698 for supply and install of R3.6 Earthwool batts in the ceiling of a 55m2 unit.

            My guess is that the media aren't interested yet as the rort is only stripping cash from us greedy landlords. Once they figure out that these rip-off insulation companies are adding unnecessary cost to low income home-owners as well, maybe they will start to take some notice.
            Last edited by donna; 08-06-2018, 04:36 PM.

            Comment


            • #7
              May be picking up traction. Was mentioned on the radio in the wee small hours this morning.

              Comment


              • #8
                Here's a quote from the Sustainability Trust website:
                https://sustaintrust.org.nz/blogs/ne...tion-subsidies

                Over the past year, however, much to the surprise of the industry and EECA, there has been very little uptake by landlords. One would think that rationality would reign and if you had a legal requirement to get your rental insulated, had vulnerable tenants, and could get it done at 50% of the market cost – you’d jump in.

                But this hasn’t happened. There are a variety of reasons, perhaps one being that government provided EECA with very little marketing budget so landlords could be forgiven for not being aware of the offer.
                I've had 3 or 4 quotes over the last year for one particular rental.
                In each case I was to pay the full amount for the work (about $2500) and the insulation installer would pocket from $1000 to $2200 via the subsidy.
                And here we have the Sustainability Trust puzzled at landlords not jumping in and picking up a 50% saving.
                The is no saving to the landlord - it's being creamed off by the installers.
                So a call to everyone out there who has had roof and underfloor insulation installed - did you get the 50% discount/saving or did you pay full price?

                Comment


                • #9
                  But how do they know it hasn't happened ?

                  How do they know which self managing practical landlord/owners have installed the required insulation themselves ?

                  Comment


                  • #10
                    I wondered that as well Nice. We have done one rental with the subsidy, but the second one wasn't done through the subsidy for the reasons above.

                    Comment


                    • #11
                      We do our own, cheaper to pay our staff their regular wages and buy the product from Bunnings.

                      Comment


                      • #12
                        Originally posted by Meehole View Post
                        We do our own, cheaper to pay our staff their regular wages and buy the product from Bunnings.
                        Agreed, and this good practice is widespread. So therefore none of these properties are included in any of the wide sweeping claims about how far behind the inductsry is in getting all the rentals done !

                        Comment


                        • #13
                          Originally posted by Nice View Post
                          Agreed, and this good practice is widespread. So therefore none of these properties are included in any of the wide sweeping claims about how far behind the inductsry is in getting all the rentals done !
                          We did ours to the rental 5 months ago but have yet to install a heat pump. I note on an HNZ property we worked on recently that they were removing the heat pump and replacing with heaters. Not sure why, nobody there to ask.
                          Also many HNZ properties are piped for gas but they are having to remove all the gas fittings at about $10k house. Reason being that many tenants have bad credit so they can't get an account for gas supply. Alot have prepaid power or pay as you go and that is not the case with a gas supply. So because so many HNZ tenants have bad credit and can't get gas, our tax payer dollar now has to go towards removing it from and going to the property.

                          Comment


                          • #14
                            Originally posted by Bluecoat View Post
                            Which business did you go for in the end Donna?
                            Installed.co.nz - think they're only in Wellington but offer DIY too.

                            cheers,

                            Donna
                            SEARCH PropertyTalk, About PropertyTalk

                            BusinessBlogs - the best business articles are found here

                            Comment


                            • #15
                              Guys, do we as landlords have to state something on the tenancy agreement about the property being insulated or something?

                              Do we need to have it checked by an independent person?
                              Squadly dinky do!

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