Michael, you might change your position if you were doing this sort of work on a regular basis.
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Originally posted by Lighthouse View PostMichael, you might change your position if you were doing this sort of work on a regular basis.
I am both a former tenant and a "capitalist pig". Residential property rentals are one of few commercial areas which do not follow my preferred free market operation. This is in large part due to their preferantial lending status at banks and the artificial constraints on supply, which is a necessary prerequisite for the free market to function correctly.
Because of this, and housing's social necessity, state regulation is required in lieu of more hands-off approaches, which work well in most other industries.
While the supply side constraints are not solely the fault of landlords, it is woefully naive of anyone who entered this industry in the last 10 years to assume there would not be a considerable regulatory risk to their business plan. The penduluum is now swinging the other way and all of the much vaunted pluses of residential property investment may well turn into liabilities. Oh well, "diddums" is my response.
Feel free to convince me otherwise. I believe free and frank dialogue is a positive.Last edited by PTWhatAGreatForum; 26-01-2018, 05:30 PM.
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Originally posted by MichaelNZ View PostResidential property rentals are one of few commercial areas which do not follow my preferred rule of free market. This is in large part due to their preferential lending status at banks and the artificial constraints on supply.
1) Basel III (Or is up to a higher number, now?)
2) Constraints on supply.
Who is to blame for those? Especially No. 2?
I also have the perspective that declining wage parity in NZ - mostly under threat from cheap sweat-shop foreign labour economies - is another significant factor.
And the blame for that lies fairly and squarely at the feet of the succession of woodenheads traipsing, parading and posturing through our parliament.
Yes, I know. We get the gummint we deserve.
I opt out out that we group.
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Originally posted by Perry View PostThe preferential lending is driven by:
1) Basel III (Or is up to a higher number, now?)
2) Constraints on supply.
This has been further compounded by the perverse ability of this industry to borrow money on terms far better than any other economic activity I can think of.
The state has acted belatedly and rather half-arsed, but anyone who didn't see it coming should only blame themselves.
It is a well known rule of business that any commercial activity which involves a monopoly or any other form of political threat to the ruling elite will eventually end up being clamped down on. Put another way, if the state being too involved is an anathema to you (as it is to me), find an industry with plenty of natural competition.
This way, as long as one pays their taxes and abides by the commonly known sets of legislation which universally govern commercial activity, one will likely get left alone.Last edited by PTWhatAGreatForum; 26-01-2018, 05:43 PM.
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No. I wasn't discussing any of the wider issues that you have on your mind, just the process of tenant selection.
Naturally, there is variability in both landlord quality and tenant quality. I note that in the past you have been quite vocal about disruptive tenants annoying homeowners. Informed tenant selection and management is one way to avoid this problem.
You may be right that the pendulum is swinging the other way but the uncertainty that regulatory risk and any further government regulation will bring is actually an opportunity.
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