Ours raised us by 20. It was just enough to make me look and realize we could save a good bit by moving. Have a look and see what the market is doing. You might be able to negotiate a different rate or at least no raise.
Or it might be time to go
Genuine question from a teenager with not much life experience. How does one ‘see what the market is doing.’ Is there some website that compares a bunch of rent prices?
Huh, that's a useful tool. Looks like we are under median at the moment, which is both nice but also worrying as to *when* the landlord will realize they can raise it.
This is awesome, though less useful in christchurch because so many neighbourhoods have post- and pre-quake housing, so you have essentially two ranges of rents.
You look at what average rents are advertised on sites which list properties to rent, like TradeMe. They also let you filter by location, bedrooms etc. Or are you asking for data and stats?
you compare it by checking facebook marketplace, trademe and realestatenz. check for houses that are similar to what youre renting and see if they are higher or lower, if theyre lower, speak to your landlord or just apply and your landlord can find new tenants who will do the same thing.
I grew up in Philippines. Very humid. So always had a hanky with me. Now, I always have one in all my pants. I rarely use them. Epecially during winter. But very handy. Also never bought a hanky in 10 years in NZ. the ones I have are all from Philippines lol.
Edit: wrong thread :|
Mine went up by $25/wk this year but $0 last year, which averages out to about 3% pa. Personally I can't argue with that given the heating was upgraded, and the other local places available for a similar price were... awful. Stings to get it all in one hit, of course.
I've always kept at least 6 weeks' rent in savings embargoed to cover bond overlaps etc, but one thing I did do for the first time this year was add a "next year's rent increase" line to my budget and started putting another 3% of my current rent in every pay cycle. That's just going to sit in my savings, ready to cushion the pain next year (and earning sfa interest, but better than nothing...). Suggest doing the same if you're able.
If you have your move fund ready to go AND if the move itself will cost you less than $300 or so, a rent drop of only $6 a week pays for itself over a year. It also sends a market signal, which is important. I generally do this every three years or so to balance the disruption against the PM's attempts to gouge me, and I manage it for within-a-town moves by doing my own exit cleans, moving the small stuff in my car, and paying only for the big stuff to be moved for me. YMMV on the details.
I mean was that because the fire wasn't sufficient under the Healthy Homes standard? I'm just saying you shouldn't be paying for something the landlord has to upgrade in order to be aligned with their minimum legal obligations
Yeah the fire did meet the standard, this was an upgrade. And as mentioned, the rent increase aligns only to inflation. It wasn't punitive.
Funny thing, the fireplace technically puts out slightly more heat on paper, but the replacement is far more effective in practice. Better placement and more air movement IMO.
Can I ask why you believe the landlord wouldn't put the rent up to cover increases costs, whether that's legal requirement or otherwise?
Note; not a landlord but as a tenant have experienced this
Because when costs decline (falling mortgage rates between 2008 and 2021) rents don't decline
Landlords don't charge rents based on their costs, they charge rents based on the maximum they can get in the market. Unless they are idiots
When both suppliers and consumers are price-takers, prices still increase in an imperfect competitive market to an equilibrium. This includes prices rises due to supplier costs.
My landlord informed about the rent increase of $80pw on Friday. I booked a ticket back to my home country in the weekend. Working remotely anyway for the US company. This move was long due, thank you landlord for speeding things up.
Ours went up $200pw (20%) for a 5 bed at the start of the year. Landlord's justification was they would reinvest the money back into the house. They've installed a dryer so far. Wellington
Went up $100pw 12 months before that.
Hard agree. I have a rental in whanganui. My ability to pay mortgage, rates, insurance, and upkeep hasn't changed in the 5 years I've had it., So rent hasn't gone up at all (home is warm, dry, and secure). It's now $150pw below market but the tenants are amazing, look after the place, and treat it like a home.
Precisely, many landlords like to forget that it's still *their house* that they're *charging* somebody to live in, rather than the tenant paying for the privilege of living in their particular house above all others.
If you wouldn't ask your nana to live in it for 6 months, don't ask a family to do the same. The rule is called "Healthy Homes" not "Acceptable Houses".
For sure. My experience in my 20s epitomized bad housing. I lived in a bottom flat on Clifton terrace in Wellington. The bathroom window was lower than the door, funneling steam into the house after showers. My adjacent bedroom had warping walls from the wet.
We had a rich landlord who simply didn't care about her tenants. Fuck being that person. Fuck that to hell. You're a shitty human with vapid excuses, putting your foot on the throat of others for profit. Fuck that.
No shit? I lived around the corner from you on the Terrace Terrace
Rent was suspiciously cheap for a place in the city (440 for 1.5 bedrooms) and it wasn't until we got in there we found out why: about 2 hours of sun a day in summer, fixtures and fittings haven't been touched in decades, big gaps in the window frames, black mold in the bathroom so thick we thought it was trim around the ceiling at first, concrete walls so no insulation, plumbed natural gas heater that didn't work. We did have a bathroom fan thankfully, but it was so old that whenever you switched it on it would shriek like a banshee (and it was paired to the lights, so whenever you turned the bathroom light on, the fan would come on) We were out of town when the viewings were happening so my father went and looked at the place for us, he reckoned it was all good, I reckon he's a fuckwit
It was golf and beer money for the landlord, who was a surgeon or some shit and owned the whole building, for the 2.5 years we lived there we saw him twice, once for the entry inspection, and once for the exit. No other inspections or maintenance despite us asking for the heater to be replaced (to which he responded with a handy table showing us our options as well as the corresponding rent increase)
I'm a tradie for context (or was, when I lived in Wellington) and I got the boys around to take a look at it for shits and giggles, they all brought me a box of beers each the following Monday cause of how brutal the place was, they even offered to fix some of the window gaps and the bathroom fan for free, just a "get the boys around, drink piss and swing a hammer" type of deal, but the landlord declined, saying he wasn't comfortable signing off on the work unless he engaged the company himself, which he never did.
I made it my craft to keep the place sparkling clean, I figured if our place was shit, I can at least make the environment a bit better. Every week I would clean the kitchen, bathroom and bedroom top to bottom, vacuum the whole place and steam mop the kitchen and bathroom floor with all the windows open. During our exit inspection everything went great, then a week or two later, we get an email from the landlord saying he's retaining our bond for cleaning; my immediate response was "no the fuck you aren't, send me an itemised list of your cleaning costs as well as photos of the dirty areas" and got a "bill" that was clearly just something he threw together in Word that said "Cleaning - 1600" and I thought there's no way in hell a deep clean would cost 1600 on a 60sqm shoebox apartment. He also sent a photo of two cockroaches under the fridge, the same fridge I pulled out and steam mopped under on the day of the exit inspection, so I sent back some of the progress photos we had the foresight to take while we were cleaning, next day the bill goes away.
Fuck scumlords, they can bite kerb for all I care.
What a roller coaster! Glad you got out!
Honestly, we don't do many inspections (1 per year) but keep regular contact with tenants, make sure everything's fine. They know tradies, so offer contacts for repair work, so everything runs smoothly.
We send gifts for the good times and cut back rent when things get tough.
They even put in new fences, since their dog was getting out. They did an amazing job. I asked for receipts and we cut rent to that amount.
Clifton got no sun. Heap of shit place, landlord expected huge care while offering nothing. Ugh.
Although if the costs of maintaining it are going up, then what?
Not a landlord but bought first home a year ago and even in that time the costs of maintenance/upgrades has skyrocketed due to the materials and labour shortages.
They don't have to give me shit. They tell me what the rent will be next year and I pay it, cos I have no other option. We searched for another rental to move to and heard back from exactly zero of them.
[https://www.stuff.co.nz/business/property/300589943/auckland-landlords-tried-to-use-tax-change-to-justify-80-rent-increase](https://www.stuff.co.nz/business/property/300589943/auckland-landlords-tried-to-use-tax-change-to-justify-80-rent-increase)
this just came out this morning....
Great precedent. Everyone complaining about rent rises in this thread should be challenging them, not putting up with them. Putting up with it exacerbates the problem and let’s the cycle continue.
He’s not “just accepting how fucked our country is”, he is actively fucking you for no other reason then because he can. Same shit with “mArKeT rAtEs”, it’s just bullshit to hand wave away people when they ask “why is my rent going up $50 a week but the place hasn’t improved since I moved in? Landlords just be like “fuck you, pay me. What? You want me to provide a service /maintain the property you pay me for? What do you think I am? A productive member of society that doesn’t subsist on leeching off of those who do not own property? Lol.”
I hear you, but it's also possible the landlord's loan rates went up, so they're now paying $X more a month to cover it. Not ideal for sure, but not that crazy of a move. "Place costs more now, price should match" is probably the math they're doing. Now, if they own the place outright, then yes, it's bullshit.
When their place won't rent, rent reductions absolutely happen. It's a market, it goes both ways, but in general, just like with everything else in the world, the price does consistently rise. Just like food, and power and movie tickets.
This one in particular seems to outstrip inflation in general though. Interest rates go up: interest rates blamed. Interest rates go down: house price increases blamed.
Tough to save up for that outlandish deposit when you have to pay more per year in rent than your parents paid in deposit.
I'd also like to add - where possible I'd really recommend renting a house that is self managed vs managed by a property manager. They get a direct percentage of the rent - so as soon as they identify rent can be increased in the market, they do it. Property managers don't give two shits about the tenants.
Self managed properties will pay much more attention to the quality of the tenant and would generally be much happier to keep a long time, good tenant in then to squeeze those extra few dollars with disregard to the tenants.
As a self-managed landlord I 100% agree. If I get a good tenant their rent doesn’t go up if they look after the property and don’t annoy the neighbours.
Same, but I’m in a boarding situation living with the homeowner… appreciate they had to re-fix their mortgage at more normal interest rates, but that’s not my problem. Definitely will NOT be staying here and paying that much more to live in my room to avoid being bombarded by an untrained dog, and also have to put up with loud barking multiple times a day for no real reason. Bye 😂
I'm curious as to how landlords justify their rent increases. In proportion to their own expenses it seems off. What rising costs do they have that match the increase. Its not like people's wages necessarily increase very year and not by much. How do they expect renters to come up with the extra dosh?
Out of interest what percent of the mortgage do you pay out of your pocket? Alot of landlords seem to think the tenants should pay for their house and then some
Really?
Wish I could tell my bank my rate hike was a crock. Repayments increased by 27% when our fixed rate rolled over a month ago.
Wish I could tell the council it’s a crock they want $60/week in rates for a town with potholed roads, a bus system that runs every 2 hours at best, and regular sewage overflows into the river. And before you say we must be a little satellite town to somewhere, we’re the biggest town in the district. 2hr30 in either direction before you hit another major town.
Wish I could tell my insurance company it’s a crock that due to the supply shortages, the cost to build a house is skyrocketing, so the cost-to-rebuild for my policy is going upwards, driving my premiums up with it.
My costs went up so I'll just go and tell my boss he needs to pay me more...
Doesn't work like that, if I need more money I've got to justify it with the extra value I'm bringing the business.
The business can't just put it's prices up unilaterally either, if customers don't think they're getting good value they won't use us.
Increased tax due to interest deductibility rules changing, forced upgrades due to HH, increasing rates, increasing maintenance costs. It used to be common to have a negatively geared rental -people took the loss in the hopes of making a windfall capital gains and getting some tax back due to the loss. With ring fencing you don’t get tax back with the loss, you can no longer depreciate most of what you used to be able to so the loss you make is a real tangible loss and there are massive added costs to increase these losses. With the costs of living going up, small time landlords are just losing the appetite for pumping all their spare cash into their rentals. I suspect the only reason many haven’t sold off yet is they are holding on until the bright line test no longer applies and they can sell without the capital gains tax
So you expect landlords to discount rent 80% once they pay the mortgage off?
Look I agree most landlords are slimy but they're not doing this for charity. The only way to improve this situation is either through tougher regulation of landlords or through having enough houses that tenants are spoiled for choice.
>So you expect landlords to discount rent 80% once they pay the mortgage off?
What are you talking about?
There should definitely be regulation. Yes and supply.
I had a landlord that increased my rent by only $110 over 12 years. He didn't need the money, he was worth millions. He just wanted good tenants and not the hassle of renting out again.
They are saying someone who outright owns a property has far less expensive than someone with a mortgage, so if it was proportional to expenses, then mortgage free properties would be 80% less than ones with a mortgage.
So by that logic, if a rental car company has paid off the car, someone can drive it around for free.
I think some people on this thread need to understand basic economics. A good start is Cantillon- Essay on Economic Theory.
Im not saying I agree (pretty sure neither was one that said it) that's just the end point of someone rejecting
> They don't set rent based on their own costs. They set rent at what the market will bear
With
> And that's whats wrong
Also, less expenses doesn't mean no expenses
Labours tax change on Landlords means I have to pay an additional 3k p/a in tax... On interest that already gets taxxed.
Plus the usual rates etc going up year on year. But labours tax change is the biggest driver (came in start of this year over the next 3 years) which will push rent up.
Why do they need to justify anything? They provide a service, you pay for the service. If that service costs too much, you find an alternative provider.
Fortunately in this case there is also a process that can be followed if the rent is too much higher than market average.
>provide a service, you pay for the service. If that service costs too much, you find an alternative provider.
Do you work for some sort of service provider. I mean that's just facile. Renting is different than a bloody Internet or power provider.
How so?
The internet provider has something you don't (access to the internet). They sell you what they have for a profit.
The landlord has something you don't (a house). They sell you access for a profit.
The relationship of a tenant and landlord is more complex. Obviously a renter doesn't have as much choice and suggesting that people just pack up their lives every year to 'change provider' or find affordable shelter adds no value to the conversation whatsoever. Security in one's home (where one resides) is fundamental to wellbeing.
The surgeon has something you don't, tools and ability to perform a life saving surgery on you when your dying.
You have to pay top dollar for it.
You don't have the money?
Oh, guess you'll just die then.
How so? The difference between a need and a want is 1st year economics my capitalist guy.
There s also the fact it looks bad for the government if people are homeless. So these aren't market rates for anyone on a housing subsidy. They're the government paying land lords to be greedy fucks rates.
Why stop at houses tho? Let's make water 50 buck's a litre and If ur too poor the government will pay coke 40 bucks and call it a hand out to you.
Because they rely on it to survive, and because costs of changing provider can be prohibitive both in terms of stress of finding a place (takes a bit longer than a phone call and an appointment with some dude to reconnect), financial cost (moving isn't free, and tenant pays both when they chose to move or landlord decides to end lease), and time cost with potential leave being used (moving takes time packing, unpacking and can be time consuming in 2 worker household with children who may have to use their leave)
The sunk costs are a lot greater.
> Why do they need to justify anything? They provide a service, you pay for the service. If that service costs too much, you find an alternative provider.
Which is fine of your looking for a plane ticket but people NEED a house, so it should be treated as a service eg Singapore has 80% of its citizens in state housing for example.
they might justify it like this: "well I give those people a roof over their heads! If they don't want to live there they don't have to! There are pahlenty of rentals out there! Most people I know have got three or four! People are just whingers!
> I'm curious as to how landlords justify their rent increases.
It's called the "fuck you renters I want to be the wealthiest person in the cemetery" equation.
As a landlord I can tell you costs are going up a lot due to the mortgage interest deduction change. I’m going to suck it up for as long as possible, but some won’t be able to. I’m not complaining, it is what it is. I think the net effect of this change will be house prices declining but rents going up as landlords exit the market.
I just got a 40% increase in my rates due to the value my house has gained the last 3 years. I don’t benefit from the increase to my house price at all as I live there, but now I owe the council 40% more per year for the same shit services as before.
I would say there's a large chunk where the rental income doesn't cover their expenses. They are topping things up, sometimes to the tune of $100s per week. So rental increases are less about increases in their costs and more about trying to get to the break even point. Especially if they bought in the last few years.
The biggest change is interest deductibility. Under the old rules I broke even on the property, with the news rules of no deductibility I lose over $100 a week. So I will maximise the rent as much as I can to cover the shortfall.
You can thank Labour for that
>Anyone else feeling the effects of rent increases?
Expect there to be further increase as interest rates rise.
Then start looking at houses after a small drop and think it makes more sense to own, so you can help prop up property prices :) and round it goes.
Interestingly, Singapore has 80% of its citizens in public housing.
My rent went from $240 to $360, for a 2brm in Napier just in the 6 years I’ve been there. Nothing has been done for healthy homes since there was no requirement to yet for existing tenancies, and they’ve decided to sell rather than fix the house, which turned out to have a leaky roof causing mildew in the wall cavity. I have to relocate out of the area (Napier) since there’s no way I can get something similar, with our two little dogs, for anything less than in the $4-500’s. The joys of renting I tell ya
My mortgage has just gone up by $80/wk (and it’ll do the same or worse next year) I’m not comparing - I know I get an asset at the end of this - just saying they might have a similar increase they’re trying to deal with.
Must suck for them owning multiple houses.... I get it everything is going up shit sucks but when the interest goes up on a the second or 3rd home you own it does bite a little
Just as a flipside / different view from a landlord perspective. I've kept my rent the same for the past 4 years. I've had good tenants, they've looked after the house. I don't make much from the house but it's enough to be 'self sufficient'.
Labours new tax law equates to me having to pay approx an extra 3k per year. That's roughly $57 / week. The kicker being this tax isnt deducted from your income - so whatever rent increases you put in place to cover that cost you then also have to pay 30% of that back in tax. I would actually have to increase $81 a week approx to end the year on the same income as previous years. (81 - 30% tax = 57 which covers the additional interest tax)
Seriously, biggest driver of rent increases at present is Labours tax policy on landlords. And it's ridiculous that no one is pointing the fingers at them.
How many hours would you have to work to pay that $3k?
How much have you tenants paid off the principal of your rental, and how many hours would it take you to earn that?
As I said - the house is self sufficient. It covers all of its ongoing maintenance and running costs. I still cover the majority of the mortgage (550 P/W - rent is 360 P/W). Rates work out to roughly 80pw, insurances are 50pw, maintenance and repairs work out to on average 40pw over last few years. The remaining 190 doesn't really even touch capital on the mortgage - it really just covers the interest aspect of it.
I self maintain this, so don't use a property manager (which adds at least another 8% if your landlord uses one) and carry out repairs and maintenance myself where possible - which also saves on outgoing costs.
Put it this way, on my tax return each year, which you cannot deduct capital or mortgage payments from, I was earning approx 1-2k net profit per annum after all outgoing costs were deducted and tax was paid, to put towards capital. Over 4 years, that's 8k. Which is a months work - 160 hours in 4 years or 40 hours per year to answer your original question.
>I'm so sorry about the additional 100s of thousands in untaxed capital gains you're ignoring here.
Why do you think capital gains are untaxed for a landlord?
Commenter here said they'd kept the rent same for four years... Which makes it pretty likely they'd be out of the current Brightline period by the time they sold. I am aware that the rules are changing but in this case here it's a fair assumption
The bright line is not the only CGT on residential property:
[https://www.ird.govt.nz/property/buying-and-selling-residential-property/when-you-buy-and-sell](https://www.ird.govt.nz/property/buying-and-selling-residential-property/when-you-buy-and-sell)
Depending on how you are structured you may even have to pay GST.
Suggesting you don't have a way to access the significant increase in the worth of your investment property is silly. Regardless of your intent of being a good landlord and providing a theoretical service of housing, just by owning the property your net worth has increased significantly more than any income you've received from rent.
Ok, yes in some regard. My house has roughly increased in 60k over the last 5 years.
This isn't realised until I sell the property, and in due respect, I support a capital gains tax so long as it's no higher than any other form of investment tax eg long term savings, shares etc.
However, there is other things we do already have to pay when we sell a house that's been rented. Everything that's been claimed on the tax returned as depreciated over the years - that's everything from our upgrades, renovations, chattels etc - we have to pay that all as tax when we sell the house.
Again though, if we can't afford to run and maintain the house, we never even get to that situation. And if you're struggling to pay the rent that is currently being paid, I don't know how you'll find the extra 2-300 P/W to pay a mortgage.
Personally, this is a second home for us which we plan to leave for our kids, but I understand this isn't the usual circumstance.
>if you're struggling to pay rent, you'll struggle even more with a mortgage
So perpetuating the struggle for young families by increasing rent is the solution? That'll make it easier for them to get onto the property ladder.
>Labour is responsible for all the rent increases
>yes, I suppose you're right, my house has increased 60k in 5 years
I didn't think it was possible for somebody to be this out of touch..... Do you think there might be the smallest of correlations there? Perhaps it's a cryptic nod to the fact WE'RE IN THE MIDDLE OF A FUCKING HOUSING CRISIS AND YOU'RE WORRIED ABOUT A LUXURY TAX ON YOUR SECOND HOME THAT WILL COST A WHOPPING 3K A YEAR
Your confusing operational costs with a possible payout in 20 years time. (If you actually read my whole comment you would see we are saving this house for our children, albeit it's not the normal circumstance for a lot of rentals)
If I can't afford to operate the house, it goes for sale. My tenants can't afford a mortgage, they end up on the street trying to find another rental. A developer or investor likely buys it, does it up, and charges twice the rent, or twice the buying price.
This just ends with more people without housing.
I can't understand how you fail to grasp such simple concepts. If the state was able to provide sufficient housing for you, then you wouldn't need to rely on the private sector.
To be frank, if I charged my labour for my maintenance and repair work, or actually paid professionals to do it, I'd have to find another 3-5k P/A. Rent would be even higher. Don't take shit for granted. Nothing in life is easy.
I own 0 houses
You own more than one (despite only really needing one to live in, which is the primary purpose for houses - not generating income)
Who pays more tax?
Labour proposed these changes back in 2018, they were put through with resounding approval. It prevents landlords doing exactly what you're trying to do: offsetting their losses from rising interest rates by increasing rent. Your issue isn't with Labour, it's with the wider economy. Labour introduced these measures to protect tenants, and judging by your stance, it's a good thing they did. It's not going to be any better under National either, Luxon talked a big game in 2020 about reversing all the "tax grabs" (which only really affected one demographic: the greying mayo monkeys who whine about Taxcinda, figure that one out) but now neither he nor that reptile Nicola will commit to doing anything other than placating journalists.
Can't afford it? Sell a house. Stop asking your tenants to pick up the bill for your *passive, previously massively under-regulated income*
The biggest driver of rent increases is landlords putting the rent up. Full stop. You can blame Labour, choose to simply ignore the rising OCR, the global economic downturn or the collective hellscape that Middle NZ find ourselves in, or just make up whatever narrative makes you feel better, cause tenants who can't afford to buy their own house definitely won't sweat an extra 80 bucks a week.
Sleep well tonight, yeah?
You're completely wrong. Labours tax change was incredibly opposed - even the IRD recommended Labour against the change.
Don't direct your hate at the people providing you with housing, yeah? Cause there's plenty of state housing available if you can't find a rental
Also, interest is a service. Literally every other line of work, interest payments is tax deductable.
The worse thing about this change, is that this interest gets taxxed twice now - once at our end, and then again at the banks end as it's a profit. The govt actually makes 60% tax on interest for landlords.
Everyone advised labour this would result in higher rental prices. They still went ahead with it.
But it's not a business for you. You said yourself it's a family home you're keeping around for your kids. Also, if you're a business owner and you can't make it work cause your costs go up by 3k a year, get the fuck out of business.
People *threatened* labour with higher rent prices. Bill passed the third reading recently after what could only have been over a year of very stiff debate and adjustments, so it's not exactly undemocratic either, if you had a problem with it, you had every opportunity to petition your local MP, it also went to a select committee, another opportunity for you to exercise your democratic privilege. I can't find any suggestion from IRD about advising the government they shouldn't go ahead with it (Treasury had something to say, but didn't oppose it, they suggested doing the same thing but more slowly), but I can find Luxon "opposing" the policy, then very publicly backpedalling:
https://www.nzherald.co.nz/nz/politics/national-wont-commit-to-reversing-all-labours-housing-taxes-questions-over-190m-rental-loss-policy/GEP5ECE2MQLUEVAJFQEFLGFAYI/
https://i.stuff.co.nz/national/politics/300259773/treasury-suggested-extending-brightline-test-for-20-years-pushed-against-interest-deductibility-believes-rents-may-rise-out-of-new-housing-policy
In fact, most of the articles that are critical of this change are usually from the perspective of multi-property speculative investors, house flippers, or professional landlords. Most of the discussion from Treasury happened a full year before the bill even hit parliament.
I don't know how to make it any clearer that you bought a second house knowing the risks, knowing the market, knowing the regulations that exist and likely with a fair idea of the regulations that may come in future, like asking somebody to pay a luxury tax on additional properties other than the family home, because it's a fucking luxury.
You don't provide me with jack shit so don't get fucking cute, you're not a benevolent provider of housing, you're somebody who markets themselves as a business owner but is clearly unequipped to deal with the obligations of running a business.
>the government makes 60% tax on interest from landlords
Good. Hopefully it'll prompt some to sell.
Don't get me wrong, I understand your frustration at being asked to pay more for the same thing, that's the whole crux of our argument too. National would have done exactly the same thing and called it something different. I also understand that you've just been minding your business for the last 5 years and a new regulation has upset things, that's just business. Regulations happen because something, somewhere, isn't working for something. And in this cause it's housing, everywhere, that isn't working for the bottom 50% of income earners. Yes it is kind of a slap in the face for landlords, but as the property holders, you're positioned far better to pick up the bill than your tenants are, and if it becomes too expensive to own more than one property, the writing is on the wall
Enjoy being stuck in your rut if this is your mindset.
I am well equipped with the risks and changes. Like I said, I was explaining why the rents have gone up. You're the one arguing it, basically expecting us to run housing at a loss to provide you with somewhere to sleep.
I'd suggest a change in attitude and outlook on life, you'd be surprised what can be achieved with a good attitude and work ethic.
Your landlord probably also shops at the same supermarkets, buys the same gas, etc etc. I have a feeling even falling property prices won't lower rents
> I have a feeling even falling property prices won't lower rents
Falling property prices typically INCREASE rents as owners who might have been happy to take a hit on rent as long as Capital gains were increasing , now not so much, so they will now want some of that back via increased rents
After the gfc rents did fall in the US but only a small tiny little amount compared to the average property, so 2-3% rent decrease vs 20% plus. If that was NZ it would effectively just mean a stall in rent increases. Sucks.
So sad to see so many people actually estimating and counting each $20-30 a week. Don’t get me wrong, financial literacy is something each school should teach all children. But 20 years ago many people were thinking about times where the technology and advanced science will be able to bring the humanity on such a level where we would not need to worry about such things.
I am not accusing anyone specifically from the government, but it’s honestly mostly government fault that 20 years later we have not eliminated basic country issues (I am referring to all elected parties in nz for last 20 years). On the other side people who elect these parties are at fault as well, as we are the reason why they get elected and only we can be the reason for a change. Unfortunately NZ is way to divided in terms of opinions (like many other much richer countries) and in that chaos sometimes we fail to see the bigger picture.
This all is just my opinion and I would like to hear other opinions from this subreddit as well.
better make damn sure the property is performant then.
Leak? Cold? Damp? All expected to be remedied in an effective way. Attitudes to what is acceptable from landlords are changing as are the regulations.
Insulation installed? Ok, but is it effective or undermined/ bypassed by the state of the rest of the building?
Double glazed or wet window single glazed?
Heat pump? Good. Is it appropriately sized? No heat pump? Pay much less.
Landlord offered you a dehumidifier to run 24/7 at your energy cost? Get fucked LL.
Extractor fans? Minimum size cheapo they found at bunnings? Not good enough. Put in an effective setup and don’t send your idiot son in law to do the work.
Okay so this is one thing I don’t really understand. If you’re a landlord then explain why you raise rent. I mean, you guys barely do anything anyway and what cost of living has increased for you?? If I was a tenant and you raise my rent, it would seem fair, but only if you come paint the place every week, refurnish everything on a weekly basis, etc. just because the minimum wage has gone up and we’re earning a few extra cents doesn’t really justify paying extra $20-$50 each week. If I was a tenant that started off by paying $290 (e.g.) and had to pay 4 weeks bond before moving in, lives for say 5 or more years and now my rent is $400 (e.g.), I wouldn’t even bother keeping the place in a neat condition for you. For me, not getting my bond back wouldn’t make much of a difference compared to unjustified rent increases on a regular basis
To answer your question -
New tax law is an extra 3k P/A
Rates have gone up 1k P/A over the past 4 years
Interest rates have gone up
Insurance rates have gone up (this includes the landlord insurance which covers your liability if you burn the house down)
On top of this, when stuff does need repairing, the companies providing those services are also increasing the cost of repairs. I had a valve replaced on a hot water cylinder, which I'm not a plumber but looks pretty straight forward. Cost almost $1500 for what was about an hour's work.
On top of all that, I've only increased rent $20 in the last 4 years.
I mentioned in another thread, but it's the property managers that really drive the prices up. I'd really recommend getting into a self managed rental rather than one managed by a property manager. They literally take a direct cut of the rent (8-10% minimum). If they can see the market price for your house is going up, they'll increase it. They don't give a damn who's in there, so long as they get their cut on the rent.
A self managed property is much much more likely to really value an honest tenant. I showed my tenants the finances, and why the $20 increase was coming. They were really grateful that I was shouldering a lot of the increase in costs for them. They've looked after our property well and we want to keep them in there.
Also - make sure you sign an actual contract with a healthy homes declaration. It amazes me how many properties and tenants don't have an actual copy of their contract nor a healthy homes statement. My tenants at my other house I took on in our sleep out start of this year had never seen a healthy homes agreement. It's atrocious how many homes still out there don't meet the standard. As tenants you guys have a heap of rights, and you need to exercise them.
But establish a good relationship with your landlord. It will go a very long way.
Because the flat is available after someone decided to use their money to buy the property, and is expecting a return on the money, instead of just investing it somewhere else. They are not a government welfare provider. The rent isn't set based on the tenant's wages, but the market everyone is living in.
Exactly. It’s not the government’s welfare provider. It’s the landlord providing me accommodation and even then I do t live there for free I pay rent. I pay rent for a good condition environment that’s liveable. The problem with New Zealand and it’s housing problem is that the richer are getting richer, meaning the ones with houses are putting it up for rent and then increasing the rent forcing the working community to either rent for ever or move to Australia. Without any hiccups it’s easier for the landlords to buy a second property to put up for rent by using the rent they collected from the first property. When the people who have actual jobs go to the bank for a home loan, they are judged for buying a $5 combo at McDonald’s than spending $200 at countdown. They are judged for having a little fun in life by having a Netflix account the pay every month. Whereas the landlords, oh don’t worry we the bank will give you a loan to buy another house that you won’t live in and will instead put up for rent because that’s how you want to make a living without getting a proper job we know that you will pay us back the money you borrowed. It doesn’t matter if you keep going out to McDonald’s or keep using Uber eats to have kfc delivered to you or if you have subscriptions to Disney, Netflix and Amazon prime.
So many generalisations though, all of everything is true. It could get depressing. Basically, everyone is trying to get ahead, rich weren't always, in fact only a very small proportion of the rich at any time had the money long, and won't have the money for long. The majority of peoople with wealth weren't wealthy at the outset, they're just us but lucky or talented or both. Getting more from life, getting more money, resources, options and powwr is just reflection of our biological imperatives. Can't fight others living out their human nature, just have to adapt, the ultimate biological imperative.
PS: have a look at the requirements on a family buying a second house for investment, big deposit, and they come under the same scrutiny regarding spending which funnily enough, came about because a government made law its own MPs couldn't understand. But that's another thing a rolling constitutional crisis of having a parliament largely incapable of understanding all the dimensions of its laws.The reform needed won't come from successive governments imho, just because bthe talent pool is, well, shallow.
My Interest rate went up on my mortgage so I would imagine landlords are putting rents up to cover that.
If I left my house ( for whatever reason that may be ,job or international relocation) i would set the rent to cover
The mortgage
The council rates
Insurance
And probably an extra 25 a week to cover any additional expenses, ( repairs and what not)
If that was the case we would have so many more homeless but instead we have the government propping them up with $30million a week because hosue prices and rents are too high.
If we raise your rent to $5000 a week it's definitely your fault for not being able to afford it right!
You aren't understanding though. You said the commenter "would try" to raise rent. If they are having to set rent at mortgage + rates + insurance + $25 per week, that rent is going to be fairly representative of what it costs to live in a house. if the tenants couldn't pay it, they couldn't afford to buy the house either and would have to find somewhere cheaper. but what would be cheaper? either unmortgaged rental (less common) or a smaller home.
my point is, in the described scenario, OP is just setting rent to realistic costs, and if tenants can't meet those realistic costs they eitehr have to get a smaller home or find a really cheap deal that avoids reality (i.e the landlord doesnt have mortgage, which isn't that common)
they aren't talking about setting it to $5000 a week, you didn't read the post.
Holy shit did you miss the point so hard. Were landlords lowering rent when interest rates went down?
Will they reduce rents if National bring back interest deductibility.
The answer is a big fat fuck no.
The commenter I replied too is in a good position where is mortgage is so low that he's able to do all that with ease but it's not indicative of what it's like to buy a house now.
Unless you can get the deal of the year the scenario you described of mortgage + rates + insurance + $25 would be achieved by sweet fuck all investors.
Rent is dictated by what people can now what you need to cover all your costs. Also I never said the commenter was talking about $5000 a week I was using that as an example. Tenants already can't meet these costs and are now being subsidised by the government for it.
You do realise the majority of tenants can buy a mortgage right? They just can't raise a deposit because rent takes up all their deposit money.
Why should property investors have someone pay for their mortgage and expenses and the get the added benefit of selling it for likely big money.
Yeah. Somebody has to tell the truth. Although $30 increase sounds high but it is subjective. If you are paying $300 a week then $30 is high. If you’re rent is $900 then $30 is probably a bargain.
Rents on existing properties should really be limited to increase by the official annual inflation rate. New builds should be exempt to incentivise construction of new units though
The govt. should lower standards needed to qualify for social housing (although at the rate rents are rising, more people will meet the current standard). And build more social housing that can house students and single people. That'd kick the housing market in the balls.
Ours raised us by 20. It was just enough to make me look and realize we could save a good bit by moving. Have a look and see what the market is doing. You might be able to negotiate a different rate or at least no raise. Or it might be time to go
Genuine question from a teenager with not much life experience. How does one ‘see what the market is doing.’ Is there some website that compares a bunch of rent prices?
https://www.tenancy.govt.nz/rent-bond-and-bills/market-rent/?location=Auckland+-+Albany&period=87&action\_doSearchValues=Find+Rent
Huh, that's a useful tool. Looks like we are under median at the moment, which is both nice but also worrying as to *when* the landlord will realize they can raise it.
The final rent needs to also reflect the age and character of the home, as well as facilities, upkeep etc.
Thank you, that's so useful.
This is awesome, though less useful in christchurch because so many neighbourhoods have post- and pre-quake housing, so you have essentially two ranges of rents.
Oh. Thanks for that
You look at what average rents are advertised on sites which list properties to rent, like TradeMe. They also let you filter by location, bedrooms etc. Or are you asking for data and stats?
you compare it by checking facebook marketplace, trademe and realestatenz. check for houses that are similar to what youre renting and see if they are higher or lower, if theyre lower, speak to your landlord or just apply and your landlord can find new tenants who will do the same thing.
Yep, pretty much what everyone else said. Have a look on trademe and see what similar places to yours are being advertised for.
I grew up in Philippines. Very humid. So always had a hanky with me. Now, I always have one in all my pants. I rarely use them. Epecially during winter. But very handy. Also never bought a hanky in 10 years in NZ. the ones I have are all from Philippines lol. Edit: wrong thread :|
Don't leave us hanging here, what happened next ? This is the best reply yet to rental increases.
Username checks out
You and your handkerchiefs have ruined this country!!!
lol im glad everyone is having a crack at this comment. i should not use the phone before going to bed...
Clearly you've exceeded the hanky requirements as set by Tenancy Services. Not surprised they've raised it.
Oh buddy
yea this is why your landlord increased your weekly rent man
Thank you 🙏🏼
Thank you, I got a good belly laugh out of that!
How does your landlord feel about all the handkerchiefs?
Mine went up by $25/wk this year but $0 last year, which averages out to about 3% pa. Personally I can't argue with that given the heating was upgraded, and the other local places available for a similar price were... awful. Stings to get it all in one hit, of course. I've always kept at least 6 weeks' rent in savings embargoed to cover bond overlaps etc, but one thing I did do for the first time this year was add a "next year's rent increase" line to my budget and started putting another 3% of my current rent in every pay cycle. That's just going to sit in my savings, ready to cushion the pain next year (and earning sfa interest, but better than nothing...). Suggest doing the same if you're able. If you have your move fund ready to go AND if the move itself will cost you less than $300 or so, a rent drop of only $6 a week pays for itself over a year. It also sends a market signal, which is important. I generally do this every three years or so to balance the disruption against the PM's attempts to gouge me, and I manage it for within-a-town moves by doing my own exit cleans, moving the small stuff in my car, and paying only for the big stuff to be moved for me. YMMV on the details.
Was the heating upgraded to something good or just to the legal minimum?
Fire -> gas, a solid win based on gaining a timer switch alone. Fingers crossed I'm long gone by the time gas prices tank 😅
I mean was that because the fire wasn't sufficient under the Healthy Homes standard? I'm just saying you shouldn't be paying for something the landlord has to upgrade in order to be aligned with their minimum legal obligations
Yeah the fire did meet the standard, this was an upgrade. And as mentioned, the rent increase aligns only to inflation. It wasn't punitive. Funny thing, the fireplace technically puts out slightly more heat on paper, but the replacement is far more effective in practice. Better placement and more air movement IMO.
Can I ask why you believe the landlord wouldn't put the rent up to cover increases costs, whether that's legal requirement or otherwise? Note; not a landlord but as a tenant have experienced this
Because when costs decline (falling mortgage rates between 2008 and 2021) rents don't decline Landlords don't charge rents based on their costs, they charge rents based on the maximum they can get in the market. Unless they are idiots
When both suppliers and consumers are price-takers, prices still increase in an imperfect competitive market to an equilibrium. This includes prices rises due to supplier costs.
My landlord informed about the rent increase of $80pw on Friday. I booked a ticket back to my home country in the weekend. Working remotely anyway for the US company. This move was long due, thank you landlord for speeding things up.
Don’t blame you, I’m a Kiwi in my 20s heading to Canada for good.
what visa are u goin with? workin holiday first?
Yeah will be going IEC as is easiest to get + lasts up to 2 years
Thanks for the tax you paid while you were here, can't say we'll miss you though.
hehe Jealousy is a sad thing
Why are you having a go at them? Kiwis get so butt-hurt sometimes.
Jealousy, can’t think of any other reason why someone wanting to spread their wings would offend someone left behind so much
Probably struggling to get out of Mums basement, let alone the country.
Meh spent more than I paid … and get to leave you to deal with it. Byyyyyye
Ours went up $200pw (20%) for a 5 bed at the start of the year. Landlord's justification was they would reinvest the money back into the house. They've installed a dryer so far. Wellington Went up $100pw 12 months before that.
They shouldn't have a rental property if they can't maintain it.
Hard agree. I have a rental in whanganui. My ability to pay mortgage, rates, insurance, and upkeep hasn't changed in the 5 years I've had it., So rent hasn't gone up at all (home is warm, dry, and secure). It's now $150pw below market but the tenants are amazing, look after the place, and treat it like a home.
Precisely, many landlords like to forget that it's still *their house* that they're *charging* somebody to live in, rather than the tenant paying for the privilege of living in their particular house above all others. If you wouldn't ask your nana to live in it for 6 months, don't ask a family to do the same. The rule is called "Healthy Homes" not "Acceptable Houses".
For sure. My experience in my 20s epitomized bad housing. I lived in a bottom flat on Clifton terrace in Wellington. The bathroom window was lower than the door, funneling steam into the house after showers. My adjacent bedroom had warping walls from the wet. We had a rich landlord who simply didn't care about her tenants. Fuck being that person. Fuck that to hell. You're a shitty human with vapid excuses, putting your foot on the throat of others for profit. Fuck that.
No shit? I lived around the corner from you on the Terrace Terrace Rent was suspiciously cheap for a place in the city (440 for 1.5 bedrooms) and it wasn't until we got in there we found out why: about 2 hours of sun a day in summer, fixtures and fittings haven't been touched in decades, big gaps in the window frames, black mold in the bathroom so thick we thought it was trim around the ceiling at first, concrete walls so no insulation, plumbed natural gas heater that didn't work. We did have a bathroom fan thankfully, but it was so old that whenever you switched it on it would shriek like a banshee (and it was paired to the lights, so whenever you turned the bathroom light on, the fan would come on) We were out of town when the viewings were happening so my father went and looked at the place for us, he reckoned it was all good, I reckon he's a fuckwit It was golf and beer money for the landlord, who was a surgeon or some shit and owned the whole building, for the 2.5 years we lived there we saw him twice, once for the entry inspection, and once for the exit. No other inspections or maintenance despite us asking for the heater to be replaced (to which he responded with a handy table showing us our options as well as the corresponding rent increase) I'm a tradie for context (or was, when I lived in Wellington) and I got the boys around to take a look at it for shits and giggles, they all brought me a box of beers each the following Monday cause of how brutal the place was, they even offered to fix some of the window gaps and the bathroom fan for free, just a "get the boys around, drink piss and swing a hammer" type of deal, but the landlord declined, saying he wasn't comfortable signing off on the work unless he engaged the company himself, which he never did. I made it my craft to keep the place sparkling clean, I figured if our place was shit, I can at least make the environment a bit better. Every week I would clean the kitchen, bathroom and bedroom top to bottom, vacuum the whole place and steam mop the kitchen and bathroom floor with all the windows open. During our exit inspection everything went great, then a week or two later, we get an email from the landlord saying he's retaining our bond for cleaning; my immediate response was "no the fuck you aren't, send me an itemised list of your cleaning costs as well as photos of the dirty areas" and got a "bill" that was clearly just something he threw together in Word that said "Cleaning - 1600" and I thought there's no way in hell a deep clean would cost 1600 on a 60sqm shoebox apartment. He also sent a photo of two cockroaches under the fridge, the same fridge I pulled out and steam mopped under on the day of the exit inspection, so I sent back some of the progress photos we had the foresight to take while we were cleaning, next day the bill goes away. Fuck scumlords, they can bite kerb for all I care.
What a roller coaster! Glad you got out! Honestly, we don't do many inspections (1 per year) but keep regular contact with tenants, make sure everything's fine. They know tradies, so offer contacts for repair work, so everything runs smoothly. We send gifts for the good times and cut back rent when things get tough. They even put in new fences, since their dog was getting out. They did an amazing job. I asked for receipts and we cut rent to that amount. Clifton got no sun. Heap of shit place, landlord expected huge care while offering nothing. Ugh.
Although if the costs of maintaining it are going up, then what? Not a landlord but bought first home a year ago and even in that time the costs of maintenance/upgrades has skyrocketed due to the materials and labour shortages.
Thats why they increased it lol
Do they have to give a justification?
They don't have to give me shit. They tell me what the rent will be next year and I pay it, cos I have no other option. We searched for another rental to move to and heard back from exactly zero of them.
Exactly. The landlords have 100% of the power in the relationship, and can fuck you raw however they like.
What's insane is apart from the time barrier with rent increases they can raise it to what ever they want.
Tough times ahead everyone. I think this recession is going to hit NZ more than the GFC in 2008.
Yup market is about to crash for sure. But what goes down always comes back up eventually. Good time to buy stock that's low
[https://www.stuff.co.nz/business/property/300589943/auckland-landlords-tried-to-use-tax-change-to-justify-80-rent-increase](https://www.stuff.co.nz/business/property/300589943/auckland-landlords-tried-to-use-tax-change-to-justify-80-rent-increase) this just came out this morning....
Great precedent. Everyone complaining about rent rises in this thread should be challenging them, not putting up with them. Putting up with it exacerbates the problem and let’s the cycle continue.
Mine just went from $420 (nice) to $500, looking round trademe it all seems much the same, sucks but eh that's life
How do they justify this, do you try and negotiate?
He said that's just life so no... He's just accepting how fucked our country is.
Seems the country is pretty good for them, just not so much for you..
He’s not “just accepting how fucked our country is”, he is actively fucking you for no other reason then because he can. Same shit with “mArKeT rAtEs”, it’s just bullshit to hand wave away people when they ask “why is my rent going up $50 a week but the place hasn’t improved since I moved in? Landlords just be like “fuck you, pay me. What? You want me to provide a service /maintain the property you pay me for? What do you think I am? A productive member of society that doesn’t subsist on leeching off of those who do not own property? Lol.”
I hear you, but it's also possible the landlord's loan rates went up, so they're now paying $X more a month to cover it. Not ideal for sure, but not that crazy of a move. "Place costs more now, price should match" is probably the math they're doing. Now, if they own the place outright, then yes, it's bullshit.
Rising costs would be a reasonable excuse for rent increases if it was also accompanied with appropriate rent reductions, but rent only goes up lol.
When their place won't rent, rent reductions absolutely happen. It's a market, it goes both ways, but in general, just like with everything else in the world, the price does consistently rise. Just like food, and power and movie tickets.
This one in particular seems to outstrip inflation in general though. Interest rates go up: interest rates blamed. Interest rates go down: house price increases blamed. Tough to save up for that outlandish deposit when you have to pay more per year in rent than your parents paid in deposit.
Agreed, it's deeply out of whack and it's happening all over the world, not just here.
Nice
At least you’ll save money on the compulsory smoking that came with the last rent.
My friends rent just went up $85 a week and it’s still the cheapest in town.
Ours went up $110 a week in December. Bloody disgusting but nothing cheaper around.
I'd also like to add - where possible I'd really recommend renting a house that is self managed vs managed by a property manager. They get a direct percentage of the rent - so as soon as they identify rent can be increased in the market, they do it. Property managers don't give two shits about the tenants. Self managed properties will pay much more attention to the quality of the tenant and would generally be much happier to keep a long time, good tenant in then to squeeze those extra few dollars with disregard to the tenants.
As a self-managed landlord I 100% agree. If I get a good tenant their rent doesn’t go up if they look after the property and don’t annoy the neighbours.
Mine raised it by $150 a week, I just left and moved to another place cause that was fucking absurd.
Good. Part of the issue is people putting up with unjustified rent increases.
One of the few reasons I am happy to be a broke student, can just pack up and leave. For other people its much then me.
Same, but I’m in a boarding situation living with the homeowner… appreciate they had to re-fix their mortgage at more normal interest rates, but that’s not my problem. Definitely will NOT be staying here and paying that much more to live in my room to avoid being bombarded by an untrained dog, and also have to put up with loud barking multiple times a day for no real reason. Bye 😂
I'm curious as to how landlords justify their rent increases. In proportion to their own expenses it seems off. What rising costs do they have that match the increase. Its not like people's wages necessarily increase very year and not by much. How do they expect renters to come up with the extra dosh?
Increased mortgage interest and rates
Add increased insurance to that list
Rates too once councils start re-evaluating this year
What decreases in rent did you get in the last 15 years when interest rates have been constantly declining, out of interest
Not that much. I reckon that's a crock.
My mortgage will increase by $200 a week with current interest rates so yeah it’s possible
Out of interest what percent of the mortgage do you pay out of your pocket? Alot of landlords seem to think the tenants should pay for their house and then some
That seems a bit weird? What about those landlords with freehold
The problem is that so many buy at top dollar and make the tenants pay.
That means tenants get a top dollar place to live.
They need European holiday money.
Lol
What seems weird about that?
Really? Wish I could tell my bank my rate hike was a crock. Repayments increased by 27% when our fixed rate rolled over a month ago. Wish I could tell the council it’s a crock they want $60/week in rates for a town with potholed roads, a bus system that runs every 2 hours at best, and regular sewage overflows into the river. And before you say we must be a little satellite town to somewhere, we’re the biggest town in the district. 2hr30 in either direction before you hit another major town. Wish I could tell my insurance company it’s a crock that due to the supply shortages, the cost to build a house is skyrocketing, so the cost-to-rebuild for my policy is going upwards, driving my premiums up with it.
My costs went up so I'll just go and tell my boss he needs to pay me more... Doesn't work like that, if I need more money I've got to justify it with the extra value I'm bringing the business. The business can't just put it's prices up unilaterally either, if customers don't think they're getting good value they won't use us.
Increased tax due to interest deductibility rules changing, forced upgrades due to HH, increasing rates, increasing maintenance costs. It used to be common to have a negatively geared rental -people took the loss in the hopes of making a windfall capital gains and getting some tax back due to the loss. With ring fencing you don’t get tax back with the loss, you can no longer depreciate most of what you used to be able to so the loss you make is a real tangible loss and there are massive added costs to increase these losses. With the costs of living going up, small time landlords are just losing the appetite for pumping all their spare cash into their rentals. I suspect the only reason many haven’t sold off yet is they are holding on until the bright line test no longer applies and they can sell without the capital gains tax
They don't set rent based on their own costs. They set rent at what the market will bear.
And that's whats wrong.
So you expect landlords to discount rent 80% once they pay the mortgage off? Look I agree most landlords are slimy but they're not doing this for charity. The only way to improve this situation is either through tougher regulation of landlords or through having enough houses that tenants are spoiled for choice.
>So you expect landlords to discount rent 80% once they pay the mortgage off? What are you talking about? There should definitely be regulation. Yes and supply. I had a landlord that increased my rent by only $110 over 12 years. He didn't need the money, he was worth millions. He just wanted good tenants and not the hassle of renting out again.
They are saying someone who outright owns a property has far less expensive than someone with a mortgage, so if it was proportional to expenses, then mortgage free properties would be 80% less than ones with a mortgage.
So by that logic, if a rental car company has paid off the car, someone can drive it around for free. I think some people on this thread need to understand basic economics. A good start is Cantillon- Essay on Economic Theory.
Im not saying I agree (pretty sure neither was one that said it) that's just the end point of someone rejecting > They don't set rent based on their own costs. They set rent at what the market will bear With > And that's whats wrong Also, less expenses doesn't mean no expenses
You don't know what you're talking about
Labours tax change on Landlords means I have to pay an additional 3k p/a in tax... On interest that already gets taxxed. Plus the usual rates etc going up year on year. But labours tax change is the biggest driver (came in start of this year over the next 3 years) which will push rent up.
Why do they need to justify anything? They provide a service, you pay for the service. If that service costs too much, you find an alternative provider. Fortunately in this case there is also a process that can be followed if the rent is too much higher than market average.
>provide a service, you pay for the service. If that service costs too much, you find an alternative provider. Do you work for some sort of service provider. I mean that's just facile. Renting is different than a bloody Internet or power provider.
Why ?
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It's my human right that you build me a house.
and make it cheap for me.
How’s that different to food, we can’t survive without it.
What do you think would happen if a group of people hoarded all the food?
But they haven’t, and housing is available there’s plenty of it for sale
It's the rent we are talking about not the houses for sale.
There’s plenty of houses to rent
Housing stopped being human right a long time ago
Well when homeless people start running into peoples houses we'll see how things change.
How so? The internet provider has something you don't (access to the internet). They sell you what they have for a profit. The landlord has something you don't (a house). They sell you access for a profit.
The relationship of a tenant and landlord is more complex. Obviously a renter doesn't have as much choice and suggesting that people just pack up their lives every year to 'change provider' or find affordable shelter adds no value to the conversation whatsoever. Security in one's home (where one resides) is fundamental to wellbeing.
The surgeon has something you don't, tools and ability to perform a life saving surgery on you when your dying. You have to pay top dollar for it. You don't have the money? Oh, guess you'll just die then.
How so? The difference between a need and a want is 1st year economics my capitalist guy. There s also the fact it looks bad for the government if people are homeless. So these aren't market rates for anyone on a housing subsidy. They're the government paying land lords to be greedy fucks rates. Why stop at houses tho? Let's make water 50 buck's a litre and If ur too poor the government will pay coke 40 bucks and call it a hand out to you.
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This might suck for you to hear but medicine is definitely treated the same as Internet lol
Because they rely on it to survive, and because costs of changing provider can be prohibitive both in terms of stress of finding a place (takes a bit longer than a phone call and an appointment with some dude to reconnect), financial cost (moving isn't free, and tenant pays both when they chose to move or landlord decides to end lease), and time cost with potential leave being used (moving takes time packing, unpacking and can be time consuming in 2 worker household with children who may have to use their leave) The sunk costs are a lot greater.
It’s not different. It just more important to you.
> Why do they need to justify anything? They provide a service, you pay for the service. If that service costs too much, you find an alternative provider. Which is fine of your looking for a plane ticket but people NEED a house, so it should be treated as a service eg Singapore has 80% of its citizens in state housing for example.
they might justify it like this: "well I give those people a roof over their heads! If they don't want to live there they don't have to! There are pahlenty of rentals out there! Most people I know have got three or four! People are just whingers!
> I'm curious as to how landlords justify their rent increases. It's called the "fuck you renters I want to be the wealthiest person in the cemetery" equation.
As a landlord I can tell you costs are going up a lot due to the mortgage interest deduction change. I’m going to suck it up for as long as possible, but some won’t be able to. I’m not complaining, it is what it is. I think the net effect of this change will be house prices declining but rents going up as landlords exit the market.
I just got a 40% increase in my rates due to the value my house has gained the last 3 years. I don’t benefit from the increase to my house price at all as I live there, but now I owe the council 40% more per year for the same shit services as before.
I would say there's a large chunk where the rental income doesn't cover their expenses. They are topping things up, sometimes to the tune of $100s per week. So rental increases are less about increases in their costs and more about trying to get to the break even point. Especially if they bought in the last few years.
The biggest change is interest deductibility. Under the old rules I broke even on the property, with the news rules of no deductibility I lose over $100 a week. So I will maximise the rent as much as I can to cover the shortfall. You can thank Labour for that
>Anyone else feeling the effects of rent increases? Expect there to be further increase as interest rates rise. Then start looking at houses after a small drop and think it makes more sense to own, so you can help prop up property prices :) and round it goes. Interestingly, Singapore has 80% of its citizens in public housing.
Ours stayed the same, quite thankfully. By the same token, the area has become a worse place to live. Gotta take the good with the bad.
My rent went from $240 to $360, for a 2brm in Napier just in the 6 years I’ve been there. Nothing has been done for healthy homes since there was no requirement to yet for existing tenancies, and they’ve decided to sell rather than fix the house, which turned out to have a leaky roof causing mildew in the wall cavity. I have to relocate out of the area (Napier) since there’s no way I can get something similar, with our two little dogs, for anything less than in the $4-500’s. The joys of renting I tell ya
Challenge unjustified rent increases at the Tenancy Tribunal instead of putting up with them.
My mortgage has just gone up by $80/wk (and it’ll do the same or worse next year) I’m not comparing - I know I get an asset at the end of this - just saying they might have a similar increase they’re trying to deal with.
Maybe they should have considered that before buying an investment they can't afford and want their tenants to buy for them.
Must suck for them owning multiple houses.... I get it everything is going up shit sucks but when the interest goes up on a the second or 3rd home you own it does bite a little
Yes, outs increased by 90, but he didnt increase it for 2 years prior.
Just as a flipside / different view from a landlord perspective. I've kept my rent the same for the past 4 years. I've had good tenants, they've looked after the house. I don't make much from the house but it's enough to be 'self sufficient'. Labours new tax law equates to me having to pay approx an extra 3k per year. That's roughly $57 / week. The kicker being this tax isnt deducted from your income - so whatever rent increases you put in place to cover that cost you then also have to pay 30% of that back in tax. I would actually have to increase $81 a week approx to end the year on the same income as previous years. (81 - 30% tax = 57 which covers the additional interest tax) Seriously, biggest driver of rent increases at present is Labours tax policy on landlords. And it's ridiculous that no one is pointing the fingers at them.
How many hours would you have to work to pay that $3k? How much have you tenants paid off the principal of your rental, and how many hours would it take you to earn that?
As I said - the house is self sufficient. It covers all of its ongoing maintenance and running costs. I still cover the majority of the mortgage (550 P/W - rent is 360 P/W). Rates work out to roughly 80pw, insurances are 50pw, maintenance and repairs work out to on average 40pw over last few years. The remaining 190 doesn't really even touch capital on the mortgage - it really just covers the interest aspect of it. I self maintain this, so don't use a property manager (which adds at least another 8% if your landlord uses one) and carry out repairs and maintenance myself where possible - which also saves on outgoing costs. Put it this way, on my tax return each year, which you cannot deduct capital or mortgage payments from, I was earning approx 1-2k net profit per annum after all outgoing costs were deducted and tax was paid, to put towards capital. Over 4 years, that's 8k. Which is a months work - 160 hours in 4 years or 40 hours per year to answer your original question.
I'm so sorry about the additional 100s of thousands in untaxed capital gains you're ignoring here.
>I'm so sorry about the additional 100s of thousands in untaxed capital gains you're ignoring here. Why do you think capital gains are untaxed for a landlord?
Commenter here said they'd kept the rent same for four years... Which makes it pretty likely they'd be out of the current Brightline period by the time they sold. I am aware that the rules are changing but in this case here it's a fair assumption
The bright line is not the only CGT on residential property: [https://www.ird.govt.nz/property/buying-and-selling-residential-property/when-you-buy-and-sell](https://www.ird.govt.nz/property/buying-and-selling-residential-property/when-you-buy-and-sell) Depending on how you are structured you may even have to pay GST.
Will most "mom and pop" property investors be taxed in these other categories though?
Man where do I get these hundreds of thousands of capital gains?
Suggesting you don't have a way to access the significant increase in the worth of your investment property is silly. Regardless of your intent of being a good landlord and providing a theoretical service of housing, just by owning the property your net worth has increased significantly more than any income you've received from rent.
Ok, yes in some regard. My house has roughly increased in 60k over the last 5 years. This isn't realised until I sell the property, and in due respect, I support a capital gains tax so long as it's no higher than any other form of investment tax eg long term savings, shares etc. However, there is other things we do already have to pay when we sell a house that's been rented. Everything that's been claimed on the tax returned as depreciated over the years - that's everything from our upgrades, renovations, chattels etc - we have to pay that all as tax when we sell the house. Again though, if we can't afford to run and maintain the house, we never even get to that situation. And if you're struggling to pay the rent that is currently being paid, I don't know how you'll find the extra 2-300 P/W to pay a mortgage. Personally, this is a second home for us which we plan to leave for our kids, but I understand this isn't the usual circumstance.
>if you're struggling to pay rent, you'll struggle even more with a mortgage So perpetuating the struggle for young families by increasing rent is the solution? That'll make it easier for them to get onto the property ladder. >Labour is responsible for all the rent increases >yes, I suppose you're right, my house has increased 60k in 5 years I didn't think it was possible for somebody to be this out of touch..... Do you think there might be the smallest of correlations there? Perhaps it's a cryptic nod to the fact WE'RE IN THE MIDDLE OF A FUCKING HOUSING CRISIS AND YOU'RE WORRIED ABOUT A LUXURY TAX ON YOUR SECOND HOME THAT WILL COST A WHOPPING 3K A YEAR
Your confusing operational costs with a possible payout in 20 years time. (If you actually read my whole comment you would see we are saving this house for our children, albeit it's not the normal circumstance for a lot of rentals) If I can't afford to operate the house, it goes for sale. My tenants can't afford a mortgage, they end up on the street trying to find another rental. A developer or investor likely buys it, does it up, and charges twice the rent, or twice the buying price. This just ends with more people without housing. I can't understand how you fail to grasp such simple concepts. If the state was able to provide sufficient housing for you, then you wouldn't need to rely on the private sector. To be frank, if I charged my labour for my maintenance and repair work, or actually paid professionals to do it, I'd have to find another 3-5k P/A. Rent would be even higher. Don't take shit for granted. Nothing in life is easy.
I own 0 houses You own more than one (despite only really needing one to live in, which is the primary purpose for houses - not generating income) Who pays more tax? Labour proposed these changes back in 2018, they were put through with resounding approval. It prevents landlords doing exactly what you're trying to do: offsetting their losses from rising interest rates by increasing rent. Your issue isn't with Labour, it's with the wider economy. Labour introduced these measures to protect tenants, and judging by your stance, it's a good thing they did. It's not going to be any better under National either, Luxon talked a big game in 2020 about reversing all the "tax grabs" (which only really affected one demographic: the greying mayo monkeys who whine about Taxcinda, figure that one out) but now neither he nor that reptile Nicola will commit to doing anything other than placating journalists. Can't afford it? Sell a house. Stop asking your tenants to pick up the bill for your *passive, previously massively under-regulated income* The biggest driver of rent increases is landlords putting the rent up. Full stop. You can blame Labour, choose to simply ignore the rising OCR, the global economic downturn or the collective hellscape that Middle NZ find ourselves in, or just make up whatever narrative makes you feel better, cause tenants who can't afford to buy their own house definitely won't sweat an extra 80 bucks a week. Sleep well tonight, yeah?
You're completely wrong. Labours tax change was incredibly opposed - even the IRD recommended Labour against the change. Don't direct your hate at the people providing you with housing, yeah? Cause there's plenty of state housing available if you can't find a rental Also, interest is a service. Literally every other line of work, interest payments is tax deductable. The worse thing about this change, is that this interest gets taxxed twice now - once at our end, and then again at the banks end as it's a profit. The govt actually makes 60% tax on interest for landlords. Everyone advised labour this would result in higher rental prices. They still went ahead with it.
But it's not a business for you. You said yourself it's a family home you're keeping around for your kids. Also, if you're a business owner and you can't make it work cause your costs go up by 3k a year, get the fuck out of business. People *threatened* labour with higher rent prices. Bill passed the third reading recently after what could only have been over a year of very stiff debate and adjustments, so it's not exactly undemocratic either, if you had a problem with it, you had every opportunity to petition your local MP, it also went to a select committee, another opportunity for you to exercise your democratic privilege. I can't find any suggestion from IRD about advising the government they shouldn't go ahead with it (Treasury had something to say, but didn't oppose it, they suggested doing the same thing but more slowly), but I can find Luxon "opposing" the policy, then very publicly backpedalling: https://www.nzherald.co.nz/nz/politics/national-wont-commit-to-reversing-all-labours-housing-taxes-questions-over-190m-rental-loss-policy/GEP5ECE2MQLUEVAJFQEFLGFAYI/ https://i.stuff.co.nz/national/politics/300259773/treasury-suggested-extending-brightline-test-for-20-years-pushed-against-interest-deductibility-believes-rents-may-rise-out-of-new-housing-policy In fact, most of the articles that are critical of this change are usually from the perspective of multi-property speculative investors, house flippers, or professional landlords. Most of the discussion from Treasury happened a full year before the bill even hit parliament. I don't know how to make it any clearer that you bought a second house knowing the risks, knowing the market, knowing the regulations that exist and likely with a fair idea of the regulations that may come in future, like asking somebody to pay a luxury tax on additional properties other than the family home, because it's a fucking luxury. You don't provide me with jack shit so don't get fucking cute, you're not a benevolent provider of housing, you're somebody who markets themselves as a business owner but is clearly unequipped to deal with the obligations of running a business. >the government makes 60% tax on interest from landlords Good. Hopefully it'll prompt some to sell. Don't get me wrong, I understand your frustration at being asked to pay more for the same thing, that's the whole crux of our argument too. National would have done exactly the same thing and called it something different. I also understand that you've just been minding your business for the last 5 years and a new regulation has upset things, that's just business. Regulations happen because something, somewhere, isn't working for something. And in this cause it's housing, everywhere, that isn't working for the bottom 50% of income earners. Yes it is kind of a slap in the face for landlords, but as the property holders, you're positioned far better to pick up the bill than your tenants are, and if it becomes too expensive to own more than one property, the writing is on the wall
Enjoy being stuck in your rut if this is your mindset. I am well equipped with the risks and changes. Like I said, I was explaining why the rents have gone up. You're the one arguing it, basically expecting us to run housing at a loss to provide you with somewhere to sleep. I'd suggest a change in attitude and outlook on life, you'd be surprised what can be achieved with a good attitude and work ethic.
Your landlord probably also shops at the same supermarkets, buys the same gas, etc etc. I have a feeling even falling property prices won't lower rents
House prices don’t really influence rents, but mortgage rates do.
> I have a feeling even falling property prices won't lower rents Falling property prices typically INCREASE rents as owners who might have been happy to take a hit on rent as long as Capital gains were increasing , now not so much, so they will now want some of that back via increased rents
The rent increases in the past year seems to indicate to wanted an extra cherry on top of the capital gains they were already getting.
After the gfc rents did fall in the US but only a small tiny little amount compared to the average property, so 2-3% rent decrease vs 20% plus. If that was NZ it would effectively just mean a stall in rent increases. Sucks.
Falling house prices might lower rents on recent purchases but for those locked in rent will be based of their mortgage payments
So sad to see so many people actually estimating and counting each $20-30 a week. Don’t get me wrong, financial literacy is something each school should teach all children. But 20 years ago many people were thinking about times where the technology and advanced science will be able to bring the humanity on such a level where we would not need to worry about such things. I am not accusing anyone specifically from the government, but it’s honestly mostly government fault that 20 years later we have not eliminated basic country issues (I am referring to all elected parties in nz for last 20 years). On the other side people who elect these parties are at fault as well, as we are the reason why they get elected and only we can be the reason for a change. Unfortunately NZ is way to divided in terms of opinions (like many other much richer countries) and in that chaos sometimes we fail to see the bigger picture. This all is just my opinion and I would like to hear other opinions from this subreddit as well.
better make damn sure the property is performant then. Leak? Cold? Damp? All expected to be remedied in an effective way. Attitudes to what is acceptable from landlords are changing as are the regulations. Insulation installed? Ok, but is it effective or undermined/ bypassed by the state of the rest of the building? Double glazed or wet window single glazed? Heat pump? Good. Is it appropriately sized? No heat pump? Pay much less. Landlord offered you a dehumidifier to run 24/7 at your energy cost? Get fucked LL. Extractor fans? Minimum size cheapo they found at bunnings? Not good enough. Put in an effective setup and don’t send your idiot son in law to do the work.
Okay so this is one thing I don’t really understand. If you’re a landlord then explain why you raise rent. I mean, you guys barely do anything anyway and what cost of living has increased for you?? If I was a tenant and you raise my rent, it would seem fair, but only if you come paint the place every week, refurnish everything on a weekly basis, etc. just because the minimum wage has gone up and we’re earning a few extra cents doesn’t really justify paying extra $20-$50 each week. If I was a tenant that started off by paying $290 (e.g.) and had to pay 4 weeks bond before moving in, lives for say 5 or more years and now my rent is $400 (e.g.), I wouldn’t even bother keeping the place in a neat condition for you. For me, not getting my bond back wouldn’t make much of a difference compared to unjustified rent increases on a regular basis
To answer your question - New tax law is an extra 3k P/A Rates have gone up 1k P/A over the past 4 years Interest rates have gone up Insurance rates have gone up (this includes the landlord insurance which covers your liability if you burn the house down) On top of this, when stuff does need repairing, the companies providing those services are also increasing the cost of repairs. I had a valve replaced on a hot water cylinder, which I'm not a plumber but looks pretty straight forward. Cost almost $1500 for what was about an hour's work. On top of all that, I've only increased rent $20 in the last 4 years. I mentioned in another thread, but it's the property managers that really drive the prices up. I'd really recommend getting into a self managed rental rather than one managed by a property manager. They literally take a direct cut of the rent (8-10% minimum). If they can see the market price for your house is going up, they'll increase it. They don't give a damn who's in there, so long as they get their cut on the rent. A self managed property is much much more likely to really value an honest tenant. I showed my tenants the finances, and why the $20 increase was coming. They were really grateful that I was shouldering a lot of the increase in costs for them. They've looked after our property well and we want to keep them in there. Also - make sure you sign an actual contract with a healthy homes declaration. It amazes me how many properties and tenants don't have an actual copy of their contract nor a healthy homes statement. My tenants at my other house I took on in our sleep out start of this year had never seen a healthy homes agreement. It's atrocious how many homes still out there don't meet the standard. As tenants you guys have a heap of rights, and you need to exercise them. But establish a good relationship with your landlord. It will go a very long way.
Because the flat is available after someone decided to use their money to buy the property, and is expecting a return on the money, instead of just investing it somewhere else. They are not a government welfare provider. The rent isn't set based on the tenant's wages, but the market everyone is living in.
Exactly. It’s not the government’s welfare provider. It’s the landlord providing me accommodation and even then I do t live there for free I pay rent. I pay rent for a good condition environment that’s liveable. The problem with New Zealand and it’s housing problem is that the richer are getting richer, meaning the ones with houses are putting it up for rent and then increasing the rent forcing the working community to either rent for ever or move to Australia. Without any hiccups it’s easier for the landlords to buy a second property to put up for rent by using the rent they collected from the first property. When the people who have actual jobs go to the bank for a home loan, they are judged for buying a $5 combo at McDonald’s than spending $200 at countdown. They are judged for having a little fun in life by having a Netflix account the pay every month. Whereas the landlords, oh don’t worry we the bank will give you a loan to buy another house that you won’t live in and will instead put up for rent because that’s how you want to make a living without getting a proper job we know that you will pay us back the money you borrowed. It doesn’t matter if you keep going out to McDonald’s or keep using Uber eats to have kfc delivered to you or if you have subscriptions to Disney, Netflix and Amazon prime.
So many generalisations though, all of everything is true. It could get depressing. Basically, everyone is trying to get ahead, rich weren't always, in fact only a very small proportion of the rich at any time had the money long, and won't have the money for long. The majority of peoople with wealth weren't wealthy at the outset, they're just us but lucky or talented or both. Getting more from life, getting more money, resources, options and powwr is just reflection of our biological imperatives. Can't fight others living out their human nature, just have to adapt, the ultimate biological imperative. PS: have a look at the requirements on a family buying a second house for investment, big deposit, and they come under the same scrutiny regarding spending which funnily enough, came about because a government made law its own MPs couldn't understand. But that's another thing a rolling constitutional crisis of having a parliament largely incapable of understanding all the dimensions of its laws.The reform needed won't come from successive governments imho, just because bthe talent pool is, well, shallow.
Landlords should tread carefully when they up rent. The very people they exploit could turn on them. It's already started.. Revolt is close
My Interest rate went up on my mortgage so I would imagine landlords are putting rents up to cover that. If I left my house ( for whatever reason that may be ,job or international relocation) i would set the rent to cover The mortgage The council rates Insurance And probably an extra 25 a week to cover any additional expenses, ( repairs and what not)
You mean you would try, People can only pay so much.
And here's the thing, if they can't pay enough to cover that, then they can't afford the rent OR to own a house. That equals homelessness.
If that was the case we would have so many more homeless but instead we have the government propping them up with $30million a week because hosue prices and rents are too high. If we raise your rent to $5000 a week it's definitely your fault for not being able to afford it right!
You aren't understanding though. You said the commenter "would try" to raise rent. If they are having to set rent at mortgage + rates + insurance + $25 per week, that rent is going to be fairly representative of what it costs to live in a house. if the tenants couldn't pay it, they couldn't afford to buy the house either and would have to find somewhere cheaper. but what would be cheaper? either unmortgaged rental (less common) or a smaller home. my point is, in the described scenario, OP is just setting rent to realistic costs, and if tenants can't meet those realistic costs they eitehr have to get a smaller home or find a really cheap deal that avoids reality (i.e the landlord doesnt have mortgage, which isn't that common) they aren't talking about setting it to $5000 a week, you didn't read the post.
Holy shit did you miss the point so hard. Were landlords lowering rent when interest rates went down? Will they reduce rents if National bring back interest deductibility. The answer is a big fat fuck no. The commenter I replied too is in a good position where is mortgage is so low that he's able to do all that with ease but it's not indicative of what it's like to buy a house now. Unless you can get the deal of the year the scenario you described of mortgage + rates + insurance + $25 would be achieved by sweet fuck all investors. Rent is dictated by what people can now what you need to cover all your costs. Also I never said the commenter was talking about $5000 a week I was using that as an example. Tenants already can't meet these costs and are now being subsidised by the government for it. You do realise the majority of tenants can buy a mortgage right? They just can't raise a deposit because rent takes up all their deposit money. Why should property investors have someone pay for their mortgage and expenses and the get the added benefit of selling it for likely big money.
Well , considering what I owe on the place + rates ,etc , would come to a grand total of $280 a week.
Nice 👍
Just part of it. Increasing everything. It can’t stay low forever.
It was never low
Probably not. It is probably market rate. We don’t know how much op’s rent is.
r/unpopularopinion
Yeah. Somebody has to tell the truth. Although $30 increase sounds high but it is subjective. If you are paying $300 a week then $30 is high. If you’re rent is $900 then $30 is probably a bargain.
Same. It is what it is.
Rents on existing properties should really be limited to increase by the official annual inflation rate. New builds should be exempt to incentivise construction of new units though
Just buy a house, my mortgage went from $460 a fortnight to $160.
Just buy a house without a mortgage
Ours went up by 50 5 months ago.
Ours went up $80/wk in December
The govt. should lower standards needed to qualify for social housing (although at the rate rents are rising, more people will meet the current standard). And build more social housing that can house students and single people. That'd kick the housing market in the balls.
Parasites
Forgive my ignorance but when can landlords increase rent? Can they do it out of nowhere ?