Rents This Low Why Invest?

Would you pay $50 a week rent for a $1 million property?  It would be hard to turn that down if it was offered.  And on the other side of the fence – even the most naive of property owners would expect a better return than that!

This property does exist – in fact there are a few of them.  The landlord in question is HNZ. In the NZH article  the latest list of HNZ properties in Auckland included 135 worth over $800,000 each and 16 are worth more than a million dollars.

Sixteen are worth more than $1 million, with the occupants of three houses – in Orakei, Ponsonby and Westmere – paying about $50 a week in income-tested rent, and another three paying $84, $64 and $62 respectively.

You’d be very disappointed with yourself if these properties were in your portfolio and you were achieving such low rental return.

Better management of the Housing NZ properties is called for says Labour and it’s hard not to agree.  They argue it makes more sense to have more properties housing more needy folk than the current stock of housing supporting a few.

Mr Bignell said the department’s total stock was worth $1.5 billion and, at August 31, it had 69,349 houses nationally and 30,547 in Auckland.

The Government more often than not waits for tenants to vacate before selling off the expensive housing stock.  But this will be a very long drawn out process – the tenants are in no rush to leave – would you want to leave a home with harbour views for a fraction of the rent you’d pay elsewhere?

Maybe its time for a more proactive approach to turning over the expensive property stock.

One example given in the article was if HNZ sold off their 16 properties worth $17 million they could purchase 42 homes averaging $400,000 each – sounds like a good plan!

How to be a better Landlord and learn how to succeed as a property investor – download this free eBook  by Sean Wood and Steve Goodey of PropertyTutors

 

 

 

 

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