As a property investor, I have commonly been on the receiving end of tall poppy phrases such as “you disadvantage the common man by buying and selling houses to each other, without adding to the marketplace as a whole” or more commonly “property investors have it easy and are only in the
industry to make money”.
In response to the first message, I wish to share my last working week before the Covid19 shutdown:
- I met frequently with my valuer, property manager and her maintenance manager. The maintenance manager created a few new jobs which were tendered for through his network of sub-contractors.
- I spoke with my preferred real estate agents, who included their PA’s in a discussion involving the local newspaper and potential advertising space.
- I placed numerous calls with the main banks.
- I reviewed invoicing from Mitre10, Bunnings, Carters, Kmart, The Warehouse, Airbnb and Trademe. I also reviewed dockets from petrol stations, the land transfer office, every department in my local city council, my quantity surveyor, the Property Investor magazine, my mortgage broker, insurance broker, power company and my lawyer.
In response to the second:
- Just before New Zealand’s Covid19 lockdown, I rang all my tenants and asked if they were ok. I checked if everyone had groceries, I bought two new TV’s for two of my properties, I double checked the warmth of their homes and I provided unlimited internet access for those who had arranged internet through me.
- Recent government regulations require private investors to upgrade their homes to meet increased insulation and heating requirements. I among many, were already ahead of the curve for these changes however, the regulation was designed to target the worst providers of which there are not many. What is more, a large portion of homeowners have poorer insulation and heating than trustworthy rentable stock.
- Recently, investors lost most advantages with depreciation. Those who invest in property as their career of choice took a hit, whilst other businesses did not.
- Last week the government announced that property investors could not evict tenants over the next 3 months, nor could they increase rent for 6 months. Although this is fair in most circumstances given the current state of our economy, it eliminates the threat of corrective measures for bad tenants – which is the only tool private investors can rely upon when a situation turns sour.
- The Government has relaxed the depreciation rule for investors, but only investors of Commercial Property, not residential – which does not tend to benefit most private investors.
- I was offered no Covid19 rent relief package, although I must make allowances for rent payment shortages.
- Over the last 10 days I have had 14 cancellations from Airbnb, when Airbnb announced a new “Extenuating circumstances policy” which they decided would override my chosen cancelation policy.
The New Zealand marketplace tends to overly criticise the private investor, an attitude I feel is in dire need of change. I agree that prioritising my investing in property over the years has done me well. My share portfolio in comparison, has gone down 30% in the last 10 days alone. However, I have grown tired of Property Investors seemingly being the punching bag of investment classes and seek to eradicate that.
I am not looking for any credit for the actions I had undertaken in response to Covid. Property investing is my business and as a mindful business owner, I must take care of my clients (tenants). Property investing is not free. Houses are very expensive to own and operate. My perception is that property investing tends to produce overly harsh criticism on one side and a false sense of entitlement on the other. People need to understand that when it comes to properties us private investors own on paper, our ‘clients’ are those that then use these properties as their home. We need to appreciate that.
It is important private investors take this time as an opportunity to change the negative perceptions of us by maybe being less commercial and taking stock of the families that rely on us to provide them with more than a roof over their heads but rather a home.
For those investors out there – do your part. For the general public – actively practice in treating property investors as a service of value in the marketplace.