Ban on Letting Fees

[fuzzlevalve]

She appeared completely ignorant of the subject. Well done Peter.

[Wayne]

Such as. Please share.

- used to be LL paid letting fee but now, because they can, they charge the tenant
- should we have professional LLs (rather than unprofessional (Peter's words) ones, or the state (silly idea but an idea to probe nonetheless.
- Peter says it is a high workload, low income business - she asks why do people do it? Valid question and, I think, she postulates a valid possibility - they do it for the capital gain.
- Govt should fix their losing model (Peter says Govt loses $100/week for each of their property (love to see how that is worked out) she suggests. On the face of Peter's figures that is quite a reasonable suggestion.

Peters show shop analogy was a bit strange - the shoe shop doesn't get anything from the value rise. In fact the value would rise if their expenses go up - a rent rise - so shoes should cost more not less.

Someone suggested that she didn't listen and interrupted all the time - I think she listened very well and questions followed the thread quite well.
She wasn't hard hitting but, then, it is a soft show at that time of the day.

[Aston]

-

- Peter says it is a high workload, low income business - she asks why do people do it?

It's not so much what he said that impressed me but the way he said it with such a dead pan straight face. Made me want to set up a GIVE A LITTLE page for him.

But don't worry guys my lips are sealed.

[Nick G]

I'm glad we have people with your moral compass and sense of values here, Aston. Sharp contrast to those who invest to make money.

[MoveSmartBDM]

The Letting Fee is viable providing you get a PM who is worth their salt. There are way to many PMs out there now though who do very little and I do find it hard to justify the letting fee.

It's almost like real estate agents 2-3 years ago who had it easy with a hot market. So hot that it took nothing to sell the house and they clipped a huge % for next to no work.

If a PM earns the letting fee then pay it and work with a professional not a private is my stance.

[flyernzl]

It was actually quite a traumatic morning.
My vehicle started to fail on the trip into the TVNZ studio, and had to be towed away to the workshop afterwards.

I wa clear in my own mind what points I wanted to make within the interview, not all of which would be related to the PM's letting fee discussion.

These were
- the letting of a property takes time and effort, and these costs will not go away by Government waving a wand
- someone. somewhere has to pay, and inevitably it will be the customer/tenant somehow
- rent rises are both cost driven and also a reaction to shortages. How else are you going to ration the supply?
- the oft said "Your reward as a LL comes through the price appreciation of the property" is a crock. You don't get that money unless you sell the property. When you sell, you are obviously no longer the LL of that property, so that cant be your reward as a LL. Also, if you buy into that argument, rents in Galatea and Wairoa (where there is minimal property price increase) should logically be higher than rents in Auckland or Wellington.

I have learnt that in this sort of interview you have to take charge and steer the discussion. Look at how the MPs do that. You are in discussion with someoine who knows very little about the issues and who is simply working off pre-prepared notes.

Overall, I feel it went really well.
I'm improving at this sort of stuff!

[Perry]

Overall, I feel it went really well.

Agreed.

I'm improving at this sort of stuff!

Agreed, again.

Now you just need to get the car up to speed.

- the oft said "Your reward as a LL comes through the price appreciation of the property" is a crock. You don't get that money unless you sell the property. When you sell, you are obviously no longer the LL of that property, so that cant be your reward as a LL. Also, if you buy into that argument, rents in Galatea and Wairoa (where there is minimal property price increase) should logically be higher than rents in Auckland or Wellington.

1) They don't use the term price appreciation. Capital gains is far more emotive. Even provocative.

2) Although your logic is bang on, the average dim bulb anti-LL viewer wont get it. Somehow, it needs to be got across that the alleged capital gain is - in almost all cases - a change in numbers and not a gain.

How does one get that across in a sound byte.?

Anyone?

[PTWhatAGreatForum]

For several years some Landlords, inclduing those present among us, have been gloating how great they have it. Now the worm has turned.

I, for one, think it's great tenant-paid letting fees are abolished. Welcome to the real world of free market capitalism where the vendor pays their business expenses.

[Perry]

I, for one, think it's great tenant-paid letting fees are abolished. Welcome to the real world of free market capitalism where the vendor pays their business expenses.

Only in the RTA.

Doesn't work that way in the real world free market commercial sector.

The wanna-be commercial / industrial tenant generally pays all the LL's costs, as well as their own.

Then, the tenant pays the LL's Rates, insurance, and body corp fees, etc., too.

In that respect, residential tenants are a cosseted and protected lot.

[PTWhatAGreatForum]

Only in the RTA.
The wanna-be commercial / industrial tenant generally pays all the LL's costs, as well as their own.

Then, the tenant pays the LL's Rates, insurance, and body corp fees, etc., too.

1. Depends on the lease terms. My business has never paid those costs directly.

2. There is a glut of commercial space, and more being built, in cities like Auckland, which should help keep prices down.

3. Commercial property is not a human right.

[Nice]

2. There is a glut of commercial space, and more being built, in cities like Auckland, which should help keep prices down.

Residential property does not have this issue. Fix the supply before legislating to make matters worse.

[Nice]

3. Commercial property is not a human right.

It is the responsibility of the government to provide for those that cannot afford the market rates; not the responsibility of the private landlord.

[PTWhatAGreatForum]

Residential property does not have this issue. Fix the supply before legislating to make matters worse.

I agree the supply side needs to be fixed to have a sustainable free market solution. Unfortunately that's not happenng quickly enough (if at all) so the regulators need to step in.

It is the responsibility of the government to provide for those that cannot afford the market rates; not the responsibility of the private landlord.

And the government is dealing with the issue. What "fix" were you expecting?

[Nice]

I agree the supply side needs to be fixed to have a sustainable free market solution. Unfortunately that's not happenng quickly enough (if at all) so the regulators need to step in.

But the regulators stepping in is going to worsen the supply problem, which will increase the market price.

[Perry]

1. Depends on the lease terms. My business has never paid those costs directly.

2. There is a glut of commercial space, and more being built, in cities like Auckland, which should help keep prices down.

That's the market at work.

I'm sure there are all sorts of sweeteners offered when there's a surplus.

As Nice observed: fix the cause of the residential dwellings shortage - don't fiddle with problems and make matters worse.