Covid-19 Economic & General Effects for PIs & PMs

[brokerman]

Oh no!it's the end of the world!! Lets sell our properties to Jeffa! And we can rent his properties!

As a Jeff do I get a discount?!

[Perry]

OMG! Somebody Noticed.

'The Government is raising $100 billion of debt over a long period of time as a result of the lock-down. That's a huge burden that future taxpayers are going to have to pay off."

There would be higher levels of poverty and lower living standards for New Zealanders in future because of the Covid-19 economic downturn, he said, as well as other human costs such as more people suffering mental illness. More people could die as a result of those factors, he said.

"He" being an econ-o-mist with yet another after-the-fact prediction.

That aside, at least someone is making mention of the all-too-un-obvious-fact that the tooth fairy's largesse to taxpayers is going to be paid for by current and future taxpayers. Plus interest.

That's not to say that the gummint's response to the crisis is wrong.

[sidinz]

Correct! However I am not the most serious investor if some haven't figured that out by now.

Rental shortage -

As of today is there any vacancies in your portfolio?
You have six months worth of free money or mortgage deferral.

After 6 months?

Do you have any equity in your property to tide you over if you have long periods of vacancies? Or did you spend it all on trips to the Gold coast..if you did then you probably deserve to be in the woohu poop.

You do have equity..then if you're a serious investor take enough out to get you through these rough times because the lockdown is only temporary..and if you can't afford to pay between %2.89 and %3.05 finance you shouldn't be even playing this game...and its only going to get cheaper.

Air Bnb...well my theory is they are only the high end properties...and most investors are landlords not Hotel owners and I doubt Cathy is going to sell her house because a German tourist won't rent out the spare room or sleep out now her daughter is going University or RENTING on there own!.

Auckland Apartments-
Ever tried to get finance for those?bank's don't like them precisely for what is happening now..Investors that own those should only be paying cash for them..if you have finance you should have a 40% deposit (correct me if I am wrong).talk to your bank.
Apartments well in my opinion they are not the smartest investment because were not New York or Singapore. I believe investors like Mark Richardson have the capital to get through these times.

Baby boomers

Firstly Im Gen X ...the what I would call the ignored generation (yay!)

As of the 4 April 2020 There is ...wait for it ...1 death from the Corolla virus. (Sorry to disappoint you)

I believe Wealth as in Property is Generational many will pass it on to there offspring or grandchildren or even their cat
possibly with mortgages or Mortgage free and if the millenials can't afford to pay sub 3% interest rates then property investors have a responsibility to take it off their hands!

Many jobs will be lost the majority in the service and tourism industry, they are some of the lowest earning jobs in the country I doubt many owned property.
They will move to the cities for work and pay rent there.
Tourist towns have always been up and down but see my first paragraph if you need help.

Agriculture towns...the world needs food and fine wines!

I predict many businesses with office commercial leases possibly up to half may find if there staff are able to be productive slaves at home ..why would you pay hundreds of thousands of dollars a year in commercial office rent when you're employee can do the same job at home for free?
Maybe..maybe not but if I was a business owner I would be seriously looking at that option. $$$

This may force investors with commercial offices back into residential and pushing up prices from another group of greedy landlords!.

Just my thoughts

Always look on the bright side of life..bee doo...bee doo..bee...doo.

So many incorrect assumptions and black-or-white judgements based on those. Wow.

Having equity in property doesn't mean you can access it. There's thing called serviceability criteria. Bane of my life. I have good equity in a couple of properties but my single teacher's salary and high stress testing means that I can't access it. That doesn't make me a not-serious investor. So my equity would not tide me over through a long period of vacancies.

Your Airbnb theory is also totally wrong. The bulk of properties are not high end but bog standard suburban homes. Some are in touristy areas, some are not.

[Beano]

It's a very mixed bag .
Each of the tenants are affected in a different way and the landlord too.
Some Tenants are doing very well eg supplying snack foods to supermarkets and dairy. Liquor to trusts and supermarket.
It would great be great if the tenants that are doing well could subsidise the ones that are not trading

[learner]

Hello All

I've been following the news of government assistance for many people and groups at this time of extraordinary stress for our country, and applaud many of the policies to ease the burden on citizens.

From what I can see, are landlords the only group who have not been assisted by the government? Many landlords will have been hard hit by reduced, or low rental income, but still have outgoings to maintain. Businesses and their employees have been given immediate income assistance; beneficiaries have had $25 increases; the minimum wage has risen to $18.90 an hour; superannuitants will have their winter supplement doubled to $900.00, as well as their superannuation increased. I've no complaints about any of these.

However, many landlords are also in quite desperate situations, and may not be able to sustain the reduced income for long. Maybe the government can look to assist this group as well? I am aware that depreciation can be applied from the 2020/21 year, (for commercial property) and that capital expenditure can be claimed for up to $5000.00 for the current year as an expense, but neither of these give immediate relief.

The government has hinted that there may be some form of assistance for tenants of commercial properties (and by extension to landlords?), so I await the announcement with great interest. I don't think it is sustainable , nor just, to have landlords bear the complete burden of supporting their tenants, whether commercial or residential.

[Perry]

Don't Hold Your Breath

I don't think it is sustainable , nor just, to have landlords bear the complete burden of supporting their tenants, whether commercial or residential.

You may feel that way. I imagine that many on these forums support the idea, too. I do.

But after years of pillorying, vilifying, denigrating and dis-advantaging LLs, the socio-commies are struggling with the dilemma.

I made mention of it in this post, where the unabashed and unbounded hypocrisy of the W'gton woodenhead socio-commies was glaringly revealed.

If the current clown crop of W'gton socio-commies extend even so much as an olive branch to LLs, they fear being discredited and 'de-voted' by residential tenants - their main voters.

[McDuck]

You may feel that way. I imagine that many on these forums support the idea, too. I do.

But after years of pillorying, vilifying, denigrating and dis-advantaging LLs, the socio-commies are struggling with the dilemma.

I made mention of it in this post, where the unabashed and unbounded hypocrisy of the W'gton woodenhead socio-commies was glaringly revealed.

If the current clown crop of W'gton socio-commies extend even so much as an olive branch to LLs, they fear being discredited and 'de-voted' by residential tenants - their main voters.

Ha, well, that's politics.
As a party of the people, you need to be seen to support the 99% first.
Even if your genuine motivation was to make the world a better place for all,
you had better fly the company flag when you face it.

Have you considered that by forking out wads of cash to the workers,
the government are indirectly supporting the landlords?
One assumes that rent does not come from savings,
but from working.

[Sanya]

[...]

From what I can see, are landlords the only group who have not been assisted by the government? [...]


The government has hinted that there may be some form of assistance for tenants of commercial properties (and by extension to landlords?), so I await the announcement with great interest. I don't think it is sustainable , nor just, to have landlords bear the complete burden of supporting their tenants, whether commercial or residential.

Can landlords who don't have current tenants apply for financial assistance?


According to a recent article I read on RNZ, landlords may be eligible to apply for financial assistance via the wage subsidy.

The qualifying criterion is:


1. You must be a professional residential landlord (i.e. own several properties and actively work on them) and draw a regular income from work related to being a landlord and thus be considered “self-employed”.


2. Meet the other eligibility criteria including a 30 percent reduction in revenue and are proactively engaging with their bank.



The link is here:https://www.rnz.co.nz/news/business/...tions-answered

I’m just citing what RNZ have published and can’t attest to the veracity of it.

[absoluteproperty]

This book was written a couple of years ago and is well worth a read as we start to look ahead to what central governments are going to have to do and what it will mean.

Big Debt Crises

I see we have common taste in authors, you sir are fantastic, thank you. This is not one I had read - Principles of life and work is something I have incorporated into my daily life, and I feel it is so essential to the way I operate that I purchased a hard copy that sits permanently on my desk, I read a chapter per day, continuously reading that title.

I am also reading the "little book of xxx" investing series now, but thank you so much for this. Ray has a take on how overall global debt and trade markets work that in my opinion is unmatched by anyone except perhaps Mohammed El-Erian.

[Chris W]

This book was written a couple of years ago and is well worth a read as we start to look ahead to what central governments are going to have to do and what it will mean.

Big Debt Crises

This is what WINZ & I have been highlighting for several years.

Most property investors have been unaware of this risk.

[McDuck]

This is what WINZ & I have been highlighting for several years.

Most property investors have been unaware of this risk.

This looks interesting.
Many thanks.
Worth a quick read.
But I'm going to compare an contrast his ideas with every known historical empire, cultural group, and the practical laws of physics.
Any clangers are going to be judged most harshly.

[Perry]

I see we have common taste in authors.

This is what WINZ & I have been highlighting for several years.

Most property investors have been unaware of this risk.

I ask you both . . .

In a nutshell, what is it that absoluteproperty learned from the book, that was significantly different to (and changed?) what he knew, already?

In a nutshell again, what is the risk (singular or plural) that most PIs are (or have been) unaware of?

[absoluteproperty]

I ask you both . . .

In a nutshell, what is it that absoluteproperty learned from the book, that was significantly different to (and changed?) what he knew, already?

In a nutshell again, what is the risk (singular or plural) that most PIs are (or have been) unaware of?

I have not yet started this title, but from the Principles of life and work book by Dalio, I learnt that as an introvert (my wife being the extrovert) I have to change the way I am because the way I am perceived is not the nature of my true intentions. I am often perceived as confusing, and it was not until I read this book that I understood why - I do not communicate the full length of my thought processes and this leads to confusion among those that I work with even though it makes perfect sense to me.

It also taught me clearly the importance that when focusing on a specific area, it is important to understand the underlying principles of not only what you are investing in, but other contributing markets (for example, if I were renting retail space, understanding how retail space works, what they need, and how the market is changing, who the major players are and what the "recipe" of a successful retail business are, and if those things suit the property I am looking at).

To be clear, property is part of my focus with the rest being on lithium and gold mining, and a growing interest in artificial intelligence and its' impact on the future of business and employment. So reading the Principles book has lead me on the path of understanding the different grades of lithium, how it is mined, how it is blended, its role in the battery construction process and the risks to future longevity of the industry.

Looking at the NZ property market and how the "Wellington Woodenheads", I see them as the number one supporters of long term land value increases in NZ, and the greatest risk to stable business relations in my short lifetime of 35 years. I am not a fan and so spend my days working out how their dissection of business and the economy in the name of being Politically Correct and the disorderly breakdown of society it is creating can be taken advantage of at some time in the future - October 2020, or October 2024, whichever generates a change of policy.

I also love educating people that the reason they are getting $585 per week for 12 weeks without having to go to work is not because Jacinda is great and doing a fantastic job like Stuff and the Herald say, but because they failed to act when China was overrun and Hong Kong, Singapore and Korea had closed their borders and as a result instead of closed borders and a two week mandatory lock down, we now have a 4 week lockdown being ignored by many and a crippled economy nationally. Go the Wellington Woodenheads, as one poster I enjoy reading here calls them.

Apologise for my ramblings..

[McDuck]

This looks interesting.
Many thanks.
Worth a quick read.
But I'm going to compare an contrast his ideas with every known historical empire, cultural group, and the practical laws of physics.
Any clangers are going to be judged most harshly.

OK, I did a very quick read of several of his works.
I'm usually very wary of any self help books.
But in this case , I'm giving him 7/10.
4 points for actually doing it and making it work.
1 point for having the good will to share his ideas.
1 point for his wide and narrow points of view.
1 point for using the scientific method.

I'm holding back the other three points for a secret reason.
but it can best be summed up as" the square root of negative 1".

[Perry]

I have not yet started this title, but from the Principles of life and work book by Dalio, I learnt that as an introvert (my wife being the extrovert) I have to change the way I am because the way I am perceived is not the nature of my true intentions.

Apologise for my ramblings..

Don't you dare!

From what you say, it seems as much personal development as any incisive property-investment wisdom. Nothing wrong the that - just my summation.

What you describe reminds me of a quote from Winston Churchill:

People often stumble over the truth then pick themselves up and hurry off as if nothing had happened.

You didn't. Well done.