I see that a survey of 2,459 landlords has found just under half say they plan raising rents as a result of the
Budget. My first response to that is that the over 50% planning to leave them unchanged illustrates quite well
the lack of business nouse amongst average Kiwis. Given what is going to be a worsening imbalance at
current prices between the supply of and demand for rental property, failing to raise rents will not only deny
them easy income, it will prevent the very market response needed to ensure housing supply responds to
the imbalance. In a nutshell one sees why NZ is failing to go back up the OECD ladder. Tony Alexander, BNZ weekly Overview.
Property investment is a business. Its purpose is to make a profit.
When costs rise, yes – no building depreciation is ultimately a cost to property investors, rents should rise too.
Tenants understand that.
So why should you, the investor, subsidise their lifestyle? Shouldn’t they they subsidise yours? After all you are taking all the risk.
“They are great tenants”, ” They’ve been with us for five years” and ” They look after the place” are all great reasons (excuses?).
But the only way to manage a sustainable property investment business and keep a roof above your tenants heads (and your head) is to increase rents.
If you are not sure about whether or not to increase your rent ask yourself “is this a business or a charitable organisation?”
More information at Increasing the rent and How much notice do I need to give to increase the rent?.
(This is part 12 of my 30 day blogging challenge)