Out of the woods

Optimism is returning to the residential housing market, which has some positive flow on effects to the economy as a whole.

This positive feeling is best shown in recent house sales reports which tend to indicate that we are past the low point of the cycle. From now on it will be a steady upward climb, although not steep.

It was useful to attend last week’s NZ Property Investors Federation Conference in Auckland to gauge the market.

You’d expect a group like this to be positive about things, and that did come through in talking to investors.

However, I couldn’t help feeling that the overall theme from speakers was to be cautious out there. The old cliché being we are not out of the woods yet. Indeed a very good presentation from the ANZ Bank left the clear message that some people may be getting ahead of the market.

Clearly the issues for investors are changing at the moment too. Earlier this year I wrote about finance being the biggest issue for investors. This is less of a problem now, and the biggest one is tenants and how to manage them.

The worst thing that can happen for a landlord is to have an empty property with no rent coming in each week.

I suspect with unemployment rising that this issue will continue to hang over the market for some time.

The message for landlords is that they have to really look after their tenants and keep a close eye on their bank account to make sure rent is being paid.

Too often I hear stories about investors not reacting soon enough when things go wrong. The rules are quite clear around what you can and can’t do, and there is plenty of information from organisations like the Department of Building and Housing and others to help investors. One of these is a series of seminars run by DBH to help landlords get it right.