As some of you will know, I am a landlord and have been, on and off, for the last 20 years. Currently, we have 2 rented houses, our tenants are really great and we are happy, but it hasn’t always been that way. There were the tenants who completely trashed the house – so badly that the commercial cleaners took ‘before and after’ photos and used them in their advertising material. There were the tenants who ran off owing hundreds in rent. There was the tenant who painted all the walls a dark purple colour – without permission. (Bear in mind he could do that now and the landlord would have no comeback, as it constitutes changes of a ‘minor nature’.)
The same tenant was given notice and left the property filthy, full of dog hair, grease everywhere… and I just didn’t have the stomach to go into the bathroom. But every form of investment has risk, and in this case, the tenant risk was high. Back in the time of the GFC, it was hard to find tenants at all, especially if the property was in a less-than-desirable area of town. But thankfully, here we are, due mainly to government’s and councils’ inability or reluctance to deal with the problem, enjoying good times for landlords. It won’t last; things will change, as they always do, but it is most enjoyable to enjoy sunny skies as a landlord for a change.
But of course, landlords are the scum of the earth, as a recent Twitter thread has shown. Try this out for wanton stupidity:
Many times have I been in the situation where the rent didn’t cover the mortgage, and I wasn’t alone. Back in the early 2000s, it was commonplace for landlords to be propping up their rentals by thousands of dollars every year, accepting short term pain for long term benefits. Well, here we are… and some people just hate it.
What ‘justinesaysjoinyourunion’ fails to see is that the government has deliberately slanted everything away from landlords, yet they continue to profit because so many landlords have sold up, taken their handsome capital gains, and left the market with fewer available properties. There is now a CGT payable on an investment property if sold within 5 years of purchase, losses cannot be offset against other income, depreciation cannot be claimed, insulation costs are not deductible, rents can only be increased once a year and landlords cannot give notice without a good reason.
All of these things contribute to a tightening rental market where landlords still call most of the shots and tenants are all the poorer for it.
Another piece of really good news is that fewer tenants now have rent arrears. This makes sense if you think about it; if there are few other rental properties available, then you don’t want to be evicted from the one that you have. This makes things even better for landlords, as they continue to laugh all the way to the bank.
There is this, of course:
‘Justine’ is, of course, Justine Sachs, notorious hard left unionist, Green Party supporter and activist. There’s a surprise.
Well Justine, I have a simple answer for you. You don’t have to live in a house owned by a filthy capitalist. You have a choice. Buy a place for yourself, move back with your parents, or put yourself on the state housing waiting list. In the meantime, there are a few bridges and park benches still available. That would be much better than living in a house owned by a filthy capitalist, wouldn’t it?
Justine can blame landlords as much as she likes, but the problem is a supply problem. Local councils will not release land for housing. The government is reforming the RMA, but it will take years, and not much will happen before then. We have a shortage of skilled tradespeople. We lost about 400 proposed houses because of the Ihumatao dispute, and the Shelley Bay project is clearly going the same way. It makes no sense to me either that a country the size of New Zealand has such a huge housing problem, but it is wrong to blame landlords. Without private landlords, the problem would be considerably worse than it already is.
As soon as one of our existing tenants gives notice, that property is going on the market. It has cost a lot of money and effort to bring that property up to the Healthy Homes standard, and the rent will not cover the costs for some considerable time. I don’t begrudge my tenants living in a warm, healthy home but it has been hard meeting the deadlines because of a shortage of tradespeople. It is not worth it for tenants who now have free rein to trash the place with little or no consequence, so we are going to take our capital gains and run.
Which, I’m sure, is exactly what you would do in the same situation, wouldn’t you, Justine?
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