What being a landlord has taught me...

Every group of people has its rotten apples: teachers, police officers, children aged eight, Wellingtonians, people whose name starts with 'A.' No matter how you group them, there will always be a few bad eggs.

Written by Sian Draper:  Pr​operty investors are no different and we deplore the slumlords who give us all a bad name. Most of us are everyday, hardworking people with regular jobs who just want to get ahead in life and are prepared to make sacrifices to get there.

An online property investors' group I'm part of includes teachers, nurses, IT techs, tradies, cleaners, firemen and all kinds of everyday people.

We work hard to give our tenants a home. No, we're not depriving first home buyers of their opportunity. Society actually needs landlords, to house those who can't (or don't want to) buy their own.

In order not to make a loss, investors need to pay under market value for a property. We can't fall in love with a dream home and bid it up like first home buyers can, and do. We feel for those who are struggling to buy their first home, but we're not to blame for the spiralling prices.

Approximately 70 per cent of landlords only own one rental, roughly another 20 per cent own two. Most are doing it as a way to fund their retirement. They scrimp and save to get that property because they don't trust the sharemarket (may remember the big crashes) and feel that start-up companies are too risky.

Many don't have the cash to buy the quality of rental they'd like to have, so they buy an old dunger and do it up themselves. They go without to build the deposit and pay for the renovation materials because they believe in short-term pain for long-term gain.

Many of us have put newer or better kitchensand bathrooms into our rentals than into our own homes. This is very true of me: my house has the original 60s kitchen with an inconveniently narrow bench and the old cast iron bathtub that badly needs resurfacing.
Buy and hold investors are not the same as speculators and there is, and always has been, a capital gains tax for speculators. If someone buys a property with the intention of re-selling it for a profit, income tax and GST are payable.
Ruakura Inland Port
Ruakura Inland Port
Before and after photos of the kitchen renovation by Sian
While in the past some people have not declared it and got away with it, that is now impossible.There are no tax loopholes/advantages. In fact, compared to other businesses, not being able to claim GST on expenses is a disadvantage.

Just like there are bad apple landlords, there are bad apple tenants.The horror stories of people who've lost thousands and thousands of dollars due to bad tenants are heartbreaking.

After spending large sums renovating, to turn around and pay thousands more to repair the damage out of your own pocket is demoralising.

This is because recent law changes mean that a tenant just has to say it was an accident and they don't have to pay a bean. If there are five holes in the wall or stains on the carpet et cetera, an insurance company may count them as separate events, meaning there are five excesses to pay costing anywhere from $2500 to $15000.

Often, it's cheaper for the owners to pay for the repairs themselves than to pay those excesses and lose their no claims discount. Even if the landlord wins a case at the Tenancy Tribunal, they have to provide current contact details for the ex-tenant - all but impossible if they've done a runner - and the tenant may only be ordered to pay $5-10 per week.

Some people actually believe that the amount they pay in rent goes straight into the landlord's pockets. In reality most of it goes to a foreign-owned bank, while other huge chunks go on rates and insurance.

Investors make very little per property and that small profit is taxed.Therefore those losses from tenant damage really hurt and come out of the owner's pocket. This causes some owners to sell up after a bad experience. That's bad because landlords selling up causes rents to rise as supply decreases. Just because 30 landlords sell their houses, it doesn't mean that there are 30 fewer tenant families who are now homeowners.

There are many stories about some service providers and tradies padding their invoices because they think we're loaded. A company I once hired to clean a small 76 square metre house billed me $900.

It's actually really expensive to have a change of tenant. So landlords won't give tenants notice without reason. We would prefer for tenants to stay for several years. Some even offer their tenants long-term contracts, but the tenants want the flexibility of month-to-month tenancies. In fact, the statistics show that tenants are far, far more likely to end a tenancy than a landlord is.

There is so much misinformation out there on cold, damp, mouldy homes.I have seen for myself, many, many times, how a perfectly normal house that has raised generations of Kiwi families suddenly becomes unliveable when a new tenant moves in.

Everyday living introduces moisture into our homes. Breathing, bathing and cooking (even using some forms of heating such as unflued gas heaters) are normal activities that put water into the air in our homes. Most of us know to ventilate our homes by opening windows or doors. Some of us use extractors or dehumidifiers.

Some tenants actually fight landlords' efforts to combat the moisture by switching off ventilation systems, showering in the dark when the extractor is wired to the light switch and not using rangehoods. Others dry their laundry inside with the curtains drawn and the windows closed. Just where is the moisture supposed to go?

Insulating the houses just makes it worse, as the insulation, without heating and ventilation, just traps the moisture even more.

We are just ordinary folk who work our butts off to provide good housing for people who don't want to or can't buy a home of their own, at great personal financial risk, in a hostile social and regulatory environment, so that we can hope for a secure future.

We are Kiwi battlers. Yet it is a battle that we often don't tell our neighbours and colleagues about due to negative public opinion.


From Stuff.co.nz