NZ 1st homebuyers are ScReWeD...

[thegreatestben]

I've got two new builds I developed, I rent and manage them myself. I can tell you the two things that are setting the rent I'm asking is interest rate and shortly behind is insurance and rates increases. I'm about to refix and I'll be topping them up more per week than the rent one of them brings in per week.

If landlords have less pressure on cashflow they have less pressure to raise or have "high" rents, most of us want to retain good tenants well ahead of squeezing every last dollar out of them.

[Aaron]

I've got two new builds I developed, I rent and manage them myself. I can tell you the two things that are setting the rent I'm asking is interest rate and shortly behind is insurance and rates increases. I'm about to refix and I'll be topping them up more per week than the rent one of them brings in per week.

If landlords have less pressure on cashflow they have less pressure to raise or have "high" rents, most of us want to retain good tenants well ahead of squeezing every last dollar out of them.

Good on you, I must sound like an ahole complaining about landlords. Good tenants make it easy, I had tenants that must have thought I was a wealthy landlord so stopped paying rent for a few weeks over christmas every year, very stressful, by the time they caught up it was christmas again. Ended up in arbitration/court, fortunately they were sort of genuine and paid it all eventually.

I hope you managed to add some value/gains over and above the cost of the new builds, I understand a few years back building costs were rising so fast builders were losing on fixed price contracts and if it wasn't fixed price I guess the planned cost of the investment blew out.

What gross and net rental yields do you work on if you don't mind me asking?

I think locally our rates are about to go through the roof in the next year and insurance has already risen significantly.

[thegreatestben]

I think gross is somewhere around 4.5%
It's hard to give you a good set of numbers because this all fell out of my personal home which I purchased (first home) in 2012.
I probably got caught a little bit by increased costs but what really added to the cost was personal choice to build stand alones with separate titles. I also relocated the original house on site and did major improvements such as complete double glazing, new roof and fully refinished inside and out (which I DIY'd quite a bit of).

We are "debt free" on our personal home and the new builds are valued at more than the total debt. This upcoming financial year likely to be the worst but I only need to see interest rates around 5% to be happy with my overall cashflow.

I'm personally very happy with what we have done in terms of contributing to supply and doing so in a way I think will lead to good outcomes in the long term. I think it will be a "good" investment in the long run but it's having a pretty massive impact on our lives and has been since about 2020.

[Aaron]

Appreciate your honesty hope it all continues to go well.

I might be a bit old fashioned worrying about yields but I always thought that if the old depreciation rates of 1-2% fairly represented the deterioration of a house over many years 4.5% does not leave a lot to maintain the property and take some income. That said I have been way wrong with these concerns as house prices doubled over the last 10 years and John Key reckons they will double again over the next 10.

On a heavily leveraged property that is the best way to accumulate wealth.

That is why I come across as bitter when discussing central banks. I should never have feared debt and borrowed much more than I have.

[Aaron]

Maybe some public servants wanting the govt to look bad but IRD on the case.

https://www.newstalkzb.co.nz/news/bu...rial-property/

Depreciation denial on commercial buildings not a good idea according to IRD.

It said even under the status quo, where 2 per cent depreciation deductions are allowed, New Zealand is likely to be the least attractive country in the OECD to invest in commercial and industrial buildings.

“Denying depreciation deductions will drive up these hurdle rates of return even higher and make New Zealand a less attractive location for investment,” Inland Revenue said

Obviously Chris Luxon does not own a lot of commercial property. Maybe just residential like his voter base.

[Bjauck]

Taking on debt was certainly the way to accumulate equity in the past, in an environment of falling interest rates and surging asset (especially residential property) prices from the 1980’s onwards. However from today, whether this will continue to the same extent without workforce productivity gains and/or a shift away from income tax to capital or estate taxes, seems quite speculative to me.

[Aaron]

Australia appears to have the same problems around housing and immigration.

https://www.msn.com/en-nz/news/other...c55a62fa&ei=51

He brings up an important issue with figures to back up his concerns but media focus on some dummy posting online.

You're a racist bigot, Barefoot,' she wrote. 'What a load of claptrap. You've taken a complex and highly emotive issue and boiled it down to one simplistic factor: housing'.

She does not really state what the issue is and I guess would not know herself. But the statement no matter how dumb raises controversy and that is what sells papers. The media are like sh*t stirrers not truth seekers.

The front page of the herald had a headline that the Ombudsman favoured the banks over their clients and then went into the emotive story about some poor guy who fell for a scam.

To balance the article they should have asked him what happened and why did he get sucked in and does he have any personal responsibility for getting scammed?

Admittedly the headline did the trick as I was immediately outraged by the ombudsman's actions and read some of the article until I realised it was a nothing burger.

[Aaron]

The govt giveth tax cuts for landlords but will they taketh away the $2.34bill landlord subsidy? Is it keeping a roof over poor people's heads or is it allowing landlords to keep cranking up the rent?

https://www.nzherald.co.nz/business/...FGV7MVZBDBM7U/

Now might be the time to do it as landlords will be reducing rents due to interest deductibility coming back. I think denying the deduction was going straight onto the tenants if I remember the news articles at the time.