nz shares or property

[dobby41]

One of the first new rules brought in 3 years ago was banning letting fees paid by tenants to property managers. What then happened is that property managers charged owners and put the rent up to recoup the fee. Who'd have thunk it?

The landlords are in a better position to challenge the PMs on their fees than the tenants were.
The PMs came up with several different approaches on how to charge LLs - from just charge a flat fee per new let to increase the management fee to cover (one I had worked out that they worked on an average 2 year turnover).
Where that fee is on-charged is up to the market and the rent is not cost-plus but rather 'what the market will bear'.

[artemis]

....Where that fee is on-charged is up to the market and the rent is not cost-plus but rather 'what the market will bear'.

For the time being the market is coping with record rent increases in many locations. Trademe's monthly rental price index does show West Coast rents falling. Other areas not so much, and that is in a very low interest environment.

[dobby41]

For the time being the market is coping with record rent increases in many locations. Trademe's monthly rental price index does show West Coast rents falling. Other areas not so much, and that is in a very low interest environment.

Exactly - West Coast falling though their costs haven't changed (or have gone up).
That's how the market works.

[artemis]

Exactly - West Coast falling though their costs haven't changed (or have gone up).
That's how the market works.

So what happens next when rentals start reporting a rental loss that cannot be offset against other income so is being funded from tax paid income. Umm, it's the market working so options are considered by the asset owner. Because they can.

[fungus pudding]

So what happens next when rentals start reporting a rental loss that cannot be offset against other income so is being funded from tax paid income. Umm, it's the market working so options are considered by the asset owner. Because they can.

Owners have the option of selling if it becomes unprofitable to let it. Because they can. And if enough landlords choose that option the rental prices will rise. Because they can.

[artemis]

Owners have the option of selling if it becomes unprofitable to let it. Because they can. And if enough landlords choose that option the rental prices will rise. Because they can.

Quite so. AKA the Golden Rule. The ones with the gold might not make the rules these days but they sure can make their own decisions.

[dobby41]

So what happens next when rentals start reporting a rental loss that cannot be offset against other income so is being funded from tax paid income. Umm, it's the market working so options are considered by the asset owner. Because they can.

What happens?
The person wears the risk they took on.
Some take it on with rose tinted glasses and get caught out - tough!