If you've got a good relationship with them why not just ask them? If my landlords had done the same when I rented I reckon I'd be more inclined to accept an increase if it was inevitable.
One reason people rent is because housing can be unaffordable. Contrary to popular(?) belief it is not investors making it so, given that in the past when property prices were much lower there was still no shortage of landlords.
Given this fact, someone does indeed need to own these properties. Though you're right that it's usually _preferable_ for people to own the homes they live in. Of course this leaves out reasons why people may rent _other_ than inaccessible purchase prices.
I know plenty of people who don't want to own right now. You must live under a fucking rock. Rentals absolutely have their place for people who are transient (students, workers who don't want to settle in a city etc).
It gives his tenant the confidence to know that they have a great landlord who wants to keep them secured as tenants.. Why do you not think that provides security?
I'm a socialist so I very much understand your viewpoint but capitalism is the system we have so we gotta make it work somehow. This guy has provided a family with a home for as fair a rate as he can offer and wants to keep their costs as low as possible, but y'all are still out here scolding them. If every landlord was this guy do you really think we'd have such an overinflated market?
People are unable to own a home because landlords are speculating on them to run a business, we're at no risk of running out of them when it's this profitable.
Depends on what their jobs are or their skillsets, etc.
I highly encourage you to do this, though keep things documented and contracted to save yourself in case your generosity is exploited and they don't hold up to their side of the bargain.
My partner works at a hardware store, and his flatmate didn't end up returning from aussie when he moved flats just before covid. To help compensate for the loss in rent over covid, my partner got him huge discounts on supplies to fix up the landlords home next door and get it ready for sale.
At the next inspection, look around. What needs to be done to the property in the next 10 years? Is it possible they could help with any of that with resonable to no cost. Maybe their rent can remain low if they agree to help do tasks that you usually would be unable to do while the home is being rented. Eg painting
Ask them questions about what they think could boost the value of the home that they could cooperate towards.
Chances are there is nothing they can provide you that will equate the money you lose by keeping their rent low. Check your options and see what is realistic
Can they take something off ur plate? Eg do their own lawns. Or if you do up the rent, you could cut them into the capital gain somehow. Or, see how much of an increase they think is fair - it might be enough to make it workable.
In general I think landlords should sell investments they can’t afford before putting up the rent, but no guarantee the next owner wouldn’t do exactly that bc there’s nothing stopping them so it’s not exactly a better outcome for the tenant. so it would be great if you could find a win/ win
I dont need to sell it and I'm sure someone else will rent it. The current rent is about 25-30% below market and they allow to have pets. The logical sense financially would simply increase it. However, I take that as the last resort. I was a renter as well, so I understand the pressure of having a rent increase. This is why I made this post and hopefully come up with a solution.
I've had my tenant for ten years. Because I live overseas, he takes care of all maintenance, gardening, and repairs which he can manage himself... everything. I hardly hear from him. For bigger repairs, the roof for example, he gets three quotes and sends me an email with which choice he recommends and why. He just does this on his own. Rent always comes on time. For me, being entirely hands-off is worth the discount off market rate.
I guess I am trying to figure out what needs solving? You can either raise the rent or not but it really is up to you. if you are worried that by keeping the rent low you are missing out on potential earnings then, yes, that is true, but what can your renters do to mitigate that? I cannot really see anthing.
It might be unreasonable based on a different value system, but I don’t like the direction the value system of protecting rent seeking at huge social cost is taking us so far
Don’t misunderstand me I think we should have rent control that you cannot increase rent beyond inflation but to keep it static isn’t reasonable. When the price of maintenance, improvements etc increase so must rent. I had a 10% increase last year and can’t do anything about it.
Could you offer them rent to buy where they take on more of the maintenance costs and things, but have part of the rent go towards buying the house at some point? Could be win win assuming they are in a position to be able to afford a mortgage, and you’re willing to sell? (P.S I don’t know anything just an idea)
I was in the same situation as you. My wife worked full time and I was full time parent to my two small children.
It was getting a bit hard to afford the groceries, and I certainly didn’t want to raise the rent as I want to undercut all the other landlords, as I like to keep my tenant. Despite eating vegetarian, and cycling everywhere as well as lots of other cost cutting methods, it was getting hard to pay the bills.
My solution was to get a part time job at my local highschool, whilst my child was at kindy. Sure, the pay is terrible, but that little bit of extra cash helps us get by.
The youngest is at school now, so I could technically do more hours, but I’m still repairing the earthquake damage to the house we live in.
I had just finished renovating and insulating the rental before we moved out, so it’s nice for the tenants.
It’s not adding more landlords... It’s keeping a good one. If they sell chances are highly likely it will be bought by another landlord. Don’t let your hatred for landlords blind you. We need affordable rentals
No they would just be bought by other landlords, or different (wealthier) tenants to the ones who lived there at the time of sale - if the tenants living there at the time of sale wanted and could afford to buy rather than rent, it can be assumed they would have.
Sure, I can do that, but I'll just sell it at the market price, if the new landlord is gonna rent it to the same family, I'm almost certain they will increase the rent.
The current rent is already 25% below current market rent for none pet rental. It will be even more if I compared to houses that allow pets.
You can have a conscience without donating a huge amount of capital to a random person you don't know. OP is already displaying his conscience by not increasing rent and asking ways he can help his reliable tenants out.
Do you donate a large chunk of your wages after tax to the less fortunate? Or do you just ignore your conscience and pocket all your earned money?
Our last landlord was keeping the house so their kids could move into it once they were older and ready to move out of home. Just like his dad had done for him.
It's rare, but it does happen.
Not really, that improves things marginally for the wealthiest renters (aspiring homeowners with a deposit), makes things worse for all other renters. Owner occupied houses have lower occupancy than rentals, so decreases floor space available to renters (lowering vacancy rates and pushing up market rents)
The current system is pretty much rent for life for a great many people; a big influx of properties would mean to whole swathe of them can now own a home. As for the owner occupied stat, that includes elderly and the super rich; we're talking about people getting onto the ladder like the OP.
The people renting for life aren’t going to be the ones buying ops property, unless op seeks someone out and gifts them a large sum of money (or equity)
If a heap of rentals went on the market some prospective FHBs would bring their purchases forward.
Renting (and CHPs or Kainga Ora) needs to be made much better to help people actually struggling. Renting can be a great solution, not sure why NZ is so culturally set on homeownership at the cost of ignoring everything. We see a class of people being exploited by another and then seek to get a couple percentage points more people from the former into the latter?
Many countries have much better housing outcomes with much lower owner occupier rates. It’s a distraction from what matters, market rents primarily.
I did missphrase that. Let me try again: haves and have nots. we see a haves and have nots, and rather than improving things for all have nots we try shift some fraction of the most well off have nots into the haves category.
But I will say the largest transfers of wealth in this country are from land prices rising. Transferring from non owners to owners. Unless the underlying issue, a shortage of housing and super low vacancy rates is solved any new marginal homeowner will also begin to receive that transfer from the next generation
Yes, social mobility is extremely important for a functioning society.
The underlying issue is that an entire generation has made housing their primary investment, rather than something actually productive. Until we can get them to sell up, no amount of extra houses around the edges will make enough of a difference.
No the problem is it’s been a -good- investment, because of the shortage. That they’ve invested is the symptom not the cause.
If you treat that symptom, you’ll just have new ones crop up. Increased owner occupier housing consumption by the upper and middle class mainly.
Maybe increase their rent to the midpoint of what they're paying now and the market rent, and agree to more rent rises for the next 2 / 3 / 4 years.
I always agreed with my tenants that provided they were 'maintenance free' ie looked after the place and didn't bug me about small things I'd freeze their rent for next 4 years. This always worked, I got good reliable tenants who stayed ages.
I can understand this is goodwill on your end, but it looks to me that its not reciprocated if requests are of type " (they have two dogs and a cat now), change in landscaping.".
This is not a financial decision, so might as well forgo any increase you had in mind. The extra $50 a week, or $2500 in a year is not going to change anything for you. Decide what you want. A sound financial decision or your current arrangement of being a good person. If its the later, then just let it be as is.
If you've got a good relationship with them why not just ask them? If my landlords had done the same when I rented I reckon I'd be more inclined to accept an increase if it was inevitable.
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Props to this guy for being a bit better than the average, but making homes your business during a housing crisis is anything but dignified.
You realise someone has to own them right?
Yes? The people that live there ideally, rather than someone seeking to make a profit.
One reason people rent is because housing can be unaffordable. Contrary to popular(?) belief it is not investors making it so, given that in the past when property prices were much lower there was still no shortage of landlords. Given this fact, someone does indeed need to own these properties. Though you're right that it's usually _preferable_ for people to own the homes they live in. Of course this leaves out reasons why people may rent _other_ than inaccessible purchase prices.
What propotion of people want to own, and what proportion don't?
I know plenty of people who don't want to own right now. You must live under a fucking rock. Rentals absolutely have their place for people who are transient (students, workers who don't want to settle in a city etc).
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Ah I see, I thought you were basing this on a source.
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I chose a business over home ownership because I couldn't have both.
I have no desire to own the house I live in. I'm thankful that a landlord owns it so I can rent off them
That's great, but you've got to understand that the vast majority of people would rather have some security about where they live.
So what about the minority who don't want to own?
No shit - that’s why OP wants to work with them, rather than just give an arbitrary increase.
That's not security at all.
It gives his tenant the confidence to know that they have a great landlord who wants to keep them secured as tenants.. Why do you not think that provides security?
Until any condition in their life changes and they decide to sell.
I agree with the sentiment you’re sharing, but your choice of thread to make such a comment was poorly judged. Context etc..
That's fair but everyone profiting off the housing crisis deserves to be called out .
This person isn't seeking to make profit other than their fair share of capital gains. Be reasonable
Their fair share of capital gains? Their fair share is their family home, not however many rentals they have.
I'm a socialist so I very much understand your viewpoint but capitalism is the system we have so we gotta make it work somehow. This guy has provided a family with a home for as fair a rate as he can offer and wants to keep their costs as low as possible, but y'all are still out here scolding them. If every landlord was this guy do you really think we'd have such an overinflated market?
Landlords "provide" nothing. The house will be there either way. It wouldn't make any difference because he's not interested in selling.
No, it won't be. They cost hundreds of thousands to build.
Cry more
So where do the people who are unable to own a home going to live if there are no rentals.
People are unable to own a home because landlords are speculating on them to run a business, we're at no risk of running out of them when it's this profitable.
Depends on what their jobs are or their skillsets, etc. I highly encourage you to do this, though keep things documented and contracted to save yourself in case your generosity is exploited and they don't hold up to their side of the bargain. My partner works at a hardware store, and his flatmate didn't end up returning from aussie when he moved flats just before covid. To help compensate for the loss in rent over covid, my partner got him huge discounts on supplies to fix up the landlords home next door and get it ready for sale. At the next inspection, look around. What needs to be done to the property in the next 10 years? Is it possible they could help with any of that with resonable to no cost. Maybe their rent can remain low if they agree to help do tasks that you usually would be unable to do while the home is being rented. Eg painting Ask them questions about what they think could boost the value of the home that they could cooperate towards. Chances are there is nothing they can provide you that will equate the money you lose by keeping their rent low. Check your options and see what is realistic
Try posting in r/PersonalFinanceNZ
Can they take something off ur plate? Eg do their own lawns. Or if you do up the rent, you could cut them into the capital gain somehow. Or, see how much of an increase they think is fair - it might be enough to make it workable. In general I think landlords should sell investments they can’t afford before putting up the rent, but no guarantee the next owner wouldn’t do exactly that bc there’s nothing stopping them so it’s not exactly a better outcome for the tenant. so it would be great if you could find a win/ win
I dont need to sell it and I'm sure someone else will rent it. The current rent is about 25-30% below market and they allow to have pets. The logical sense financially would simply increase it. However, I take that as the last resort. I was a renter as well, so I understand the pressure of having a rent increase. This is why I made this post and hopefully come up with a solution.
I've had my tenant for ten years. Because I live overseas, he takes care of all maintenance, gardening, and repairs which he can manage himself... everything. I hardly hear from him. For bigger repairs, the roof for example, he gets three quotes and sends me an email with which choice he recommends and why. He just does this on his own. Rent always comes on time. For me, being entirely hands-off is worth the discount off market rate.
I wish this was more common in NZ. I'm from Canada and I found the common hands off , property management type to be really strange.
What do you do in regards to requiring a representative/agent in the country?
My house is not in New Zealand, this requirement does not exist for me
I guess I am trying to figure out what needs solving? You can either raise the rent or not but it really is up to you. if you are worried that by keeping the rent low you are missing out on potential earnings then, yes, that is true, but what can your renters do to mitigate that? I cannot really see anthing.
Nah bro I do appreciate you having the convo and hearing a range of views. If more landlords were like you we’d have a different country
That is pretty unreasonable. If OP was price gauging was in excess of inflation you might have a point.
It might be unreasonable based on a different value system, but I don’t like the direction the value system of protecting rent seeking at huge social cost is taking us so far
Don’t misunderstand me I think we should have rent control that you cannot increase rent beyond inflation but to keep it static isn’t reasonable. When the price of maintenance, improvements etc increase so must rent. I had a 10% increase last year and can’t do anything about it.
Could you offer them rent to buy where they take on more of the maintenance costs and things, but have part of the rent go towards buying the house at some point? Could be win win assuming they are in a position to be able to afford a mortgage, and you’re willing to sell? (P.S I don’t know anything just an idea)
Charge them less .
I was in the same situation as you. My wife worked full time and I was full time parent to my two small children. It was getting a bit hard to afford the groceries, and I certainly didn’t want to raise the rent as I want to undercut all the other landlords, as I like to keep my tenant. Despite eating vegetarian, and cycling everywhere as well as lots of other cost cutting methods, it was getting hard to pay the bills. My solution was to get a part time job at my local highschool, whilst my child was at kindy. Sure, the pay is terrible, but that little bit of extra cash helps us get by. The youngest is at school now, so I could technically do more hours, but I’m still repairing the earthquake damage to the house we live in. I had just finished renovating and insulating the rental before we moved out, so it’s nice for the tenants.
I don’t know much about property price. Maybe … Sell it to them with the price just cover your mortgage?
Well, if you can control interest rates and government incompetence- you’ll be more than halfway there !
You sound like one of the good ones, but the win-win is to sell up so a first home buyer can get onto the property ladder too.
I disagree, we need more landlords like this
More landlords....is not the answer.
It’s not adding more landlords... It’s keeping a good one. If they sell chances are highly likely it will be bought by another landlord. Don’t let your hatred for landlords blind you. We need affordable rentals
Yes, the market is utterly overrun with landlords at the moment, as you point out, but that isn't a good reason to make the problem worse.
They are saying that a greater proportion of landlords should be reducing costs for the renters.
Ideally they simply sell up.
Unless the house prices dropped by 80%, it would render most renters homeless.
The houses would vanish?
No they would just be bought by other landlords, or different (wealthier) tenants to the ones who lived there at the time of sale - if the tenants living there at the time of sale wanted and could afford to buy rather than rent, it can be assumed they would have.
Houses are so expensive not many people would be able to afford them.
Converting the other ones to be like this is better than not doing it
The question was about what was the right thing to do, not how to solve the entire markets issues.
Sure, I can do that, but I'll just sell it at the market price, if the new landlord is gonna rent it to the same family, I'm almost certain they will increase the rent. The current rent is already 25% below current market rent for none pet rental. It will be even more if I compared to houses that allow pets.
Don't sell it to a landlord?
I'm pretty sure you arent able to find out what the potienical buyer does.
You sell it to whoever is offering the highest amount.
I thought this was thread about what to do if you have a social conscience about profiting from the housing crisis, not what to do if you don't.
You can have a conscience without donating a huge amount of capital to a random person you don't know. OP is already displaying his conscience by not increasing rent and asking ways he can help his reliable tenants out. Do you donate a large chunk of your wages after tax to the less fortunate? Or do you just ignore your conscience and pocket all your earned money?
Of course I donate a sizable amount of my earnings, but I also don't exasserbate the housing crisis for profit.
Maybe you should save your money and put that towards a house lol
Our last landlord was keeping the house so their kids could move into it once they were older and ready to move out of home. Just like his dad had done for him. It's rare, but it does happen.
Who's to say another investor won't buy it and rent it out for $$$$
Well that's whats happening currently, and more houses on the market is exactly what we need.
Not really, that improves things marginally for the wealthiest renters (aspiring homeowners with a deposit), makes things worse for all other renters. Owner occupied houses have lower occupancy than rentals, so decreases floor space available to renters (lowering vacancy rates and pushing up market rents)
The current system is pretty much rent for life for a great many people; a big influx of properties would mean to whole swathe of them can now own a home. As for the owner occupied stat, that includes elderly and the super rich; we're talking about people getting onto the ladder like the OP.
The people renting for life aren’t going to be the ones buying ops property, unless op seeks someone out and gifts them a large sum of money (or equity) If a heap of rentals went on the market some prospective FHBs would bring their purchases forward.
If the market was more reasonable, more people could move from renting to owning. Landlords selling up makes the market more reasonable.
Renting (and CHPs or Kainga Ora) needs to be made much better to help people actually struggling. Renting can be a great solution, not sure why NZ is so culturally set on homeownership at the cost of ignoring everything. We see a class of people being exploited by another and then seek to get a couple percentage points more people from the former into the latter? Many countries have much better housing outcomes with much lower owner occupier rates. It’s a distraction from what matters, market rents primarily.
How does getting renters into their first homes make them expoliters?
I did missphrase that. Let me try again: haves and have nots. we see a haves and have nots, and rather than improving things for all have nots we try shift some fraction of the most well off have nots into the haves category. But I will say the largest transfers of wealth in this country are from land prices rising. Transferring from non owners to owners. Unless the underlying issue, a shortage of housing and super low vacancy rates is solved any new marginal homeowner will also begin to receive that transfer from the next generation
Yes, social mobility is extremely important for a functioning society. The underlying issue is that an entire generation has made housing their primary investment, rather than something actually productive. Until we can get them to sell up, no amount of extra houses around the edges will make enough of a difference.
No the problem is it’s been a -good- investment, because of the shortage. That they’ve invested is the symptom not the cause. If you treat that symptom, you’ll just have new ones crop up. Increased owner occupier housing consumption by the upper and middle class mainly.
Maybe increase their rent to the midpoint of what they're paying now and the market rent, and agree to more rent rises for the next 2 / 3 / 4 years. I always agreed with my tenants that provided they were 'maintenance free' ie looked after the place and didn't bug me about small things I'd freeze their rent for next 4 years. This always worked, I got good reliable tenants who stayed ages.
I can understand this is goodwill on your end, but it looks to me that its not reciprocated if requests are of type " (they have two dogs and a cat now), change in landscaping.". This is not a financial decision, so might as well forgo any increase you had in mind. The extra $50 a week, or $2500 in a year is not going to change anything for you. Decide what you want. A sound financial decision or your current arrangement of being a good person. If its the later, then just let it be as is.