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Klauster Properties Ltd - Tenant’s Blog |
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Rent vs Buy In New Zealand |
Private rental market - Can you find a tenancy for life?
Nothing is more driven by sentiments than the residential property market and in particular the rental market. When looking for information about “renting vs buying” people discuss the money side of the game, what is cheap stands up in most articles. Property investors have to cover related costs and families have to find affordable housing. These different needs don’t fit always together.
Apart from rent the next question is - how long can you stay? The private rental market doesn’t offer a tenancy for life. You can sign a periodic or fixed-term tenancy. Only the fixed-term tenancy gives you protection for the duration of the contract. That’s all. The landlord is sitting in the driver seat. If the property goes on the market for sale or the landlord claims back the house, you as tenant have to move. You like where you live, but don’t have any control how long you can use a rental place.
Often not understood what drives the rental market up and down? For tenants it is the supply and demand of rental properties available. Landlords react sensibly to changes on tax or levies, interest rates, employment figures and seasonal fluctuations. In other words the rent increase is a figure for inflation and competition (how many applicants compete for a rental).
Can you control these rising costs? No, as tenant unfortunately not. Only homeownership gives you limited control to decide where to live or what you can afford, how much you spend on maintenance or repair and how long you occupy your place of residence.
Renting is similar to owning a car or using a taxi. In most cases for a limited time you would be better off calling a taxi than buying a car. But on long-term is it a different story paying somebody to turn the steering wheel for you. It is a different (driving) experience, too.
Possibly you now understand the meaning — Can you secure a rental or find a tenancy for life?
You don’t know · How long you can afford that rental, and · How long the property is available for rent
As renter you live in somebody’s property and that person tells you what you can do or not. Consider this – people have a spirit of independence, especially New Zealanders have a love affair with DIY and housing.
Be money wise, don’t follow the crowd Klauster
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The private rental market is driven by inflation; can you secure where to live and how long to stay? Can you control rising rents and find a tenancy for life? |