Hang in there, Landlords

Monday 6 September 2004

The message is loud and clear for people who have bought rental properties in the last few years. Batten down the hatches! Ride out the storm!

By The Landlord

I'm not saying most rental investments will turn out to be bad. The long-term trends in property prices have always been upwards, and I haven't heard anyone predicting that will change.

In the next few years, though, many rental properties are going to look disappointing. And whenever that happens to any type of investment, the foolish bail out.

They bought high, and they end up selling low - a strategy that will never make them rich.

It happened to many investors in New Zealand shares after the 1987 Crash. And it happened a couple of years ago to investors in international shares or funds holding those shares. They couldn't cope with big falls. They lost heart.


But wait, you might be saying, house prices don't fall nearly as far as shares.

True. But there's a fundamental difference between shares and rental property. These days, very few people borrow to invest in shares; almost everyone borrows to invest in rentals.

Read More - Opens in a new window
Commenting is closed

Property News

Major industrial development powers on

It’s full steam ahead for the Stevenson Group’s $800 million, 361-hectare industrial and residential development in South Auckland – despite the uncertainties of the post-Covid-19 era.

House Prices

House price drops are short-lived - Alexander

Periods of house price decline are rare and "short-lived", says economist Tony Alexander, amid forecasts of a drop of 10%-15% this year.

Commercial

Resilience needed in face of change

The Reserve Bank says the commercial property sector is vulnerable to the Covid-19 crisis. But PMG Funds' chief executive believes that while there’ll be short-term pain, the biggest long-term impact will be structural change.

Mortgages

Mortgage lending slumps to record low in April

Mortgage lending fell to its lowest level on record last month as the property market ground to a halt during the Covid-19 lockdown.

Site by PHP Developer