Buy Investment Properties To Reap Benefits Of Rent Rises

state-houses-saleRents are set to rise nationwide thanks to National’s policy of selling off New Zealand’s state housing. Following on from the asset sales of power companies, state houses are the next asset on the chopping block. While this is bad news for renters, owners of investment properties are set to receive higher rents because rented accommodation will continue to be in short supply.

Social Housing Minister Paula Bennett has announced that thousands of states which are of an inappropriate size or location will be sold individually or in blocks to private investors or local iwi groups. Money from these sales is not guaranteed to go into the building or purchasing of more useable housing stock though.

Shortage of Rented Accommodation to Spark Rent Rises
Therefore a further shortage of rented accommodation is expected throughout the country, meaning that now is a great time for property investors to seek to expand their portfolios. As demand grows for rented properties, rents will rise to match demand.

Ms Bennett says she foresees the Government remaining the main providers of social housing, but with community agencies beginning to play a larger role. But with the sale of houses expected to attract the interest of cash hungry developers, there is no guarantee that there will be enough low rent properties available to meet demand.

Property Investors Should Buy Now To Benefit Financially
The current low fixed interest rates should be a large enough carrot to attract property investors into expanding their portfolios. Added to the knowledge that low cost rented accommodation will be in even short supply after the sale of thousands of state houses, investors should act now so to be ready for the rent rises that are expected to happen.

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