Wellington Property Investors' Association

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wellington@nzpif.org.nz

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23-12-2008

President's December report

As the end of December approaches, it is tempting to try and forget about the ups and downs of 2008 and focus on the good cheer of Christmas and the holiday period. We look forward to having a good time with our families and friends as well as relaxing and enjoying the summer weather. 

However, if you are a property investor and you either manage your own properties or employ a property manager to do this for you, there is never a time you can completely relax and forget about these properties. In the November report, I advised landlords to spend more time managing their properties as the impact of the world economic crisis affects us more and more in New Zealand. I said I predicted that more tenants will become financially stretched due to job losses of household members, insufficient income to meet rising costs, and increasing inability to pay repay debt.
 
However, I want to remind investors, who have given this landlord function over to a third party, to also be extra vigilant during the next six to twelve months. The findings of the recent survey regarding property managers and property management companies conducted by the NZ Property Investors’ Federation supports this advice.
 
An analysis of the type of problems that respondents using these services said they were experiencing shows that the vast majority relate to competency rather than dishonesty. Here is the breakdown of identified problems.
Rent Arrears      24%
Bad inspections 13%
Poor communication      13%
Poor management systems      13%
Lack of knowledge 11%
Poor Tenant screening        9%
Dishonesty     8%
Too busy / Disorganised 5%
High vacancies        2%
Poor promoting of property        1%
As the recession deepens, and unemployment increases, I recommend you work with your property manager to ensure that situations of rent arrears do not escalate out of hand. This is certainly not a time to be complacent.
A full report of the findings of this survey has been sent to all Associations for distribution to members. However, you can also contact Jan Hains at janhains@xtra.co.nz if you would like the report sent directly to you.
 
Bernard Hickey, the managing editor of www.interest.co.nz, a website for investors and borrowers, has been quoted in the media recently as saying the property pain has only just begun. This is certainly true for vendors in a must-sell situation and for first-home buyers who are struggling to save the minimum deposit now required by lenders. Go to https://www.nzpif.org.nz/news/view/53595 to read Bernard’s reasons for his views. However, for seasoned investors, there is now something to cheer about – the possibility of finding cash flow positive properties again. Use the relaxed holiday time to have a good look around the property market. Opportunities are there and there is often less competition at this time of year. Also keep an eye on the Investment Gems advertised on www.landlords.co.nz. Clicking on the advertisement on the right hand side of the home page of www.nzpif.org.nz will take you through to the current listings.
 
A NZ Property Investors’ Federation Executive sub committee, led by Cliff Seque (Otago PIA) and involving Grant Ogilvie (Manawatu PIA) and Sue Tierney (APIA), has been working on a new style membership card for introduction in 2009. This sub committee was set up at the last AGM and a card has been designed to assist Associations and sponsors to identify current members at a glance (or with a swipe, as a barcode option will be available). It is proposed to gradually phase in these new cards during the year.
 
Whether you are keeping an eye on your existing properties, actively looking for those opportunities to add to your property portfolio, or enjoying some leisure after a hectic year, I wish you and your families all the very best for the holiday season and for 2009.
 
Martin Evans
President.
 
 
 
 
 

Tags: federation reports

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