Klauster Properties Ltd - Tenant’s Blog

Rent vs Buy In New Zealand

Rent Increase

Who are the winners and losers?

 

 

Don’t be fooled by this emotional plea – try to take a rational approach when estimating housing costs. It is often not made clear who pays what and why. Normally people who occupy a property pay for related housing costs. It doesn’t matter if the occupant pays rent or as home owner related levies, rates, insurance, or whatever. When these expenses are going up rents are increasing, too.

 

 

That doesn’t answer the question why renting appears to be cheaper than home ownership.

 

YES—renting has costs benefits;

 

If you live in a multi-unit building or apartment building the housing costs might be lower than living in a fenced stand-alone property with gardens and larger floor space.

 

If you live in a typical rental home, you compromise your level of comfort but housing costs are lower. Only if you rent top quality, you will pay top Dollars for it.

 

Why pay homeowners more for their accommodation than renters?

 

Part of the answer is already illustrated above, but also home owners spend money on renovation, home improvements etc that supports their lifestyle. Renters normally don’t do that.

 

Not to be overlooked home owners make payments to the bank serving a mortgage and legal and finance related contribution.

 

Why do increases create

winners and losers?

 

Let us have a look at a simple example; taxpayers paid before 1997 for a liter petrol approximately 65c,  yesterday I paid 2.17 Dollars. The oil price has increased but on top of it we pay much more for petrol tax and increased GST. I’m not a supporter of the oil companies, but at least they deliver something and the quality of fuel is better, too.

 

Similar is it with housing costs. If you live in a house, you will be forced to pay for new taxation rules, increased City Council Rates, Encroachment Fees, rising local compliance costs, insurance premiums and higher prices due to inflation.

 

Businesses and landlords can’t compensate these developments and guess who has the last seat in the picking order—the taxpayer—YOU.

 

Winter is coming— If you look for a warm rental

Try here.

Klauster

Rent increases are a reflection of housing cost, taxation and demand on rentals. Who has the last seat in the picking order— the home owner or the taxpayer?

BUY–RENT-INVEST

Articles Register