Article: Speak Easy

Buy An Investment Property And  Save Generation Rent? with Michael BoturBuy An Investment Property And Save Generation Rent? with Michael Botur

REINZ told us on December 14 that Northland achieved a record median house sale price during November, up 21.2% to $515,000. Is that affordable, considering Northland is cheaper than the rest of the country? Do all the effluent, I mean AFFluent, Aucklanders flowing up here undermine our the affordability of our homes?

And can people buying investment properties to rent out alleviate the rental crisis for all my Generation Rent friends?

In August, Kiwibank’s top economists forecast a “meaningful” rise in the house prices into the mid 2020s on the back of continued under-supply of housing (we need 100,000 more houses urgently). Kiwibank’s boffins said they expected property prices to consolidate, before regaining traction into the mid-2020s – aided by income and population growth.

House prices are up 4 percent year on year, population has outgrown supply of housing for 10 years and 420,000 migrants have added demand.

KiwiBuild will eventually counteract the housing shortage, until then though, excess demand for housing is likely to keep house prices from falling sharply.

I help out a property management company with their communications, and I have many Generation Rent friends. I would love to see more rental properties offered if investors snap them out. The dream is that property investors can still reap a wee profit but more supply of rentals will keep house prices down. (You can’t rent out a KiwiBuild home, unfortunately.)

Kiwibank’s report notes house price growth reached 13% in May in Manawatu-Whanganui which has been returning astonishing 9% rental yields, according to the Kiwibank report.

Let’s say you want to buy an investment property, rent it out, make a little profit and help stop people living in garages. Rent in most parts of Northland is $360-$460 and $400 is the median (if that income exceeds your mortgage payments, why not buy a house and rent it out?)
Here are some of the essential rules you need to know to comply with the Residential Tenancies Act 1986 and the Housing Improvement Act 1947:
Each property must have:

• A room that can be used as a kitchen or kitchenette with a sink and tap connected
to useable water

• A bathroom with a shower or bath and running hot water

• A toilet (inside or outside the property) for the exclusive use of those that live in
the property

• Provision for the washing of clothes (if the house is intended for the use of 2
people or more)

• The exterior of the house must be weatherproof.

• The walls and floors need to be lined, washable and durable.

• Bathrooms and toilet rooms must have a window or other adequate means of ventilation.

• Every habitable room must have windows or other way of letting in light and ventilation

• Where the floor is made of timber, there must be adequate space and ventilation underneath it to prevent it from dampness and decay.

• Every habitable room must have artificial lighting.

• A bedroom must be at least 6 square metres. If there is more than one person sleeping in the room it will need to be bigger

• Every living room must have an approved form of heating.

Anyway, those are the basics. Buy a house, set it up, offer it to some people who need it badly, everyone’s happy.

Michael Botur has published journalism in NZ Herald, Herald on Sunday, Sunday Star-Times and Mana and he writes a lot of fiction. He moved to Whangarei in 2015 and was ecstatic to be able to afford a house here.

Leave your comment

Commenting is not available in this weblog entry.