Question from Miriam updated on 1st October 2018:
With the Healthy Homes Guarantee Act, the extension of the bright line test, the end of negative gearing, the tighter lending environment and more, the environment is changing for investors. What are some of the investing strategies that you would recommend in these times?
Our expert Kris Pedersen responded:
With issues such as Osaki many investors are going to be wary of lower socio economic properties as the landlords are likely to get saddled with more of the burden of fixing up tenant damage. My understanding is that with the negative gearing change the losses just get carried forward so it is more of an initial cash flow issue rather than actually losing them altogether.
Strategies like Airbnb may get used more but make sure you have sufficient insurance cover if you go down that route. Buy & hold is always going to work as an investment strategy. You may just need to alter your purchasing rules to compensate for some additional cost. The issues you mention may very well scare some investors off meaning supply gets reduced which could result in rental increases anyway.
Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz