A grim outlook for landlords is what the media might have you believe but is the outlook really as bad as it appears?
I would argue that it is NOT a grim outlook for landlords!
Why? Ask yourself this: Has the shortage of housing disappeared overnight?
Of course not! If anything, Covid-19 has exacerbated and highlighted the lack of suitable accommodation, which has long been a problem in NZ.
In my 40+ years of experience in the property investment business, I have always found that landlords who are properly prepared can weather any economic storm, of which this is just another.
It seems to me that landlords who have done the following three things will come out the other side of this with their property investment portfolios intact:
- Bought a quality property. Why? Because quality properties attract quality tenants. These are people who pay the rent on time, look after your property and who consider it as much theirs as yours. These are tenants you wish to look after and keep over the longer term.
- Not mortgaged up to the eyeballs. Having good cashflow in your life overall makes being a landlord easier. There is less stress, maintenance work can be carried out as usual and the inevitable unexpected expenses sorted without undue pressure.
- Bought in a location with a good mixture of employment. Although, with the current situation many jobs have disappeared it is to be hoped that this is only a temporary situation and once the lockdown is over, the country will begin to return to normal. And, even if your tenant can’t work in the short term, government assistance improves the chances of your rent being paid. A good mix of employers in the area your property is located means plenty of opportunities for your tenants if, in fact, the company they have been working for does not re-open its doors.
So, a grim outlook for landlords ahead?
If you have prepared for your portfolio correctly, this event may cause you some pain, but you will survive and begin to smile again in the not too distant future.
If you want a friendly ear to talk this over, please do get in touch.