- October 12, 2023
- Posted by: legaleseblogger
- Category: Related News
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Purchased a 3 Bedroom House in Auckland: The Struggles and the Solution
In 2019, I finally managed to purchase a 3 bedroom house in Auckland, and let me tell you, it was no walk in the park. I worked tirelessly, juggling multiple jobs and cutting back on all non-essential expenses just to make this dream a reality. Little did I know that being a landlord would test me in ways I never imagined.
To make the most out of my investment, I made the decision to move into a flat and rent out my house, with the plan of moving back in when my partner and I are ready to start a family. However, the numbers didn’t turn out as great as I had hoped. Currently, I have a hefty mortgage of 600k, with a rental income of only $600 a week. On top of that, I have to deal with various expenses such as rates amounting to $3200, insurance costs of $2100, fixed water charges, and multiple repairs.
The repair costs alone for this year have amounted to $5100, and this is not all. Due to recent changes in regulations, I can no longer claim mortgage interest as a deductible expense, which has had a significant impact on my finances. The mortgage fees alone add up to a staggering $42500 per year, and this figure will only go higher when I refix. So, in order to keep up with these costs, I had to inject $21500 of my own salary, and face the burden of a tax bill due to negative cash flow.
To make matters worse, I have realized that I am perhaps too passive in dealing with my tenant. I regret not hiring a tough property manager to handle the situation. I allowed them to have a small dog, but now they have three of them wreaking havoc on the house. The new carpets have mud stains, there are rips in the corner gib, the lawns have been destroyed, and they’ve even caused damage to the walls with some botched patch-up jobs. During inspections, they breathe down my neck and become aggressive when I mention any wrongdoing. It has become a nightmare, and I often find myself on the verge of tears.
Financially, I am struggling as well. The mounting costs have put me in a deep hole, and in an attempt to mitigate my losses, I decided to increase the rent after three years. I wrote a letter, giving a 90-day notice, only to receive an emotional phone call from the tenant, imploring me to reconsider. Their heartfelt story made me question my actions and guilt-tripped me into second-guessing my decision.
Now, I have come to the conclusion that the best course of action is to submit a 90-day move-out notice, so that I can move back into the house, repair the damages caused by the tenants, and find some flatmates to help share the financial burden. However, I am anxious about the challenges that lie ahead in executing this plan.
This is where the AI Legalese Decoder comes into play. With its innovative technology and legal expertise, the AI Legalese Decoder can assist me in navigating the complexities of lease agreements, ensuring that all legal requirements are met during the move-out process. It can provide me with valuable guidance on the proper way to terminate the tenancy, handle potential disputes with the tenant, and protect my rights as a landlord.
Being a landlord has truly broken me, and I know I am not alone in this struggle. The current rental market is unfavorable, making it unlikely that the tenants will find a place in the same price range that accepts three dogs. While the road ahead may be challenging, I am determined to take back control of my property and regain my financial stability with the help of AI Legalese Decoder.
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****** just grabbed a
Kick em out. Move in and get flatmates. They’re taking the piss. Cant afford a little rent increase but can afford 3 dogs. They damage your property, and are disrespectful of it. Their time is up.
DonÔÇÖt understand why you donÔÇÖt live in it and get two boarders? Up to $220 ea tax free means you will be $60 better off before you factor in tax, and you will get to supervise your own property and live in it
Plus you will have waaaaaay more power if you have boarders vs renters
Like itÔÇÖs good youÔÇÖre planning to do that now, but I donÔÇÖt understand why you didnÔÇÖt go with this in the first place
Make sure that when you kick them out you donÔÇÖt give in to the sob story they are bound to give you about wanting their bond back either! Sounds like youÔÇÖre going to need all that money for the repairs, and some..
Investments aren’t all sunshine and unicorns.
They come with risks, and are not always profitable, as you just found out.
If you issue a 90 day notice to move out OP just make sure you get everything 100% correct, especially around service. Check how many days are required on top for service, tack on an extra couple of days if you are unsure and make sure the service address is listed on the RTA. You don’t want to find out months later it was invalid.
Sounds like you’re not able to meet the financial demands of running a rental property business, so it’s the right decision to stop trying to do so.
Enjoy living in your home.
Get a property manager
If you cant cut it. Dont be a landlord. Seriously, idk why people expect renters to fund them being leveraged to the hilt. Your mortgage isnt an expense. It’s you building your equity. Why shouldnÔÇÖt you be paying most of that yourself?
These renters sound like dicks too.
Sounds like you have learnt from your mistakes. Could be worse, but once they are kicked out and you have flatmates in… It should be way better.
I just went through this. Be advised that they may just stop paying rent, that they may not move out at 90 days.
From the time my tenants stopped paying rent on Jan 30th, to Feb 20th when I actually applied for an eviction, it took until may 12th to get a court date, and get a bailiff to remove them.
I then spent about a month fixing various things.
I was lucky, they could have damaged the house far worse. If they know they aren’t getting their bond back, and they don’t need or aren’t getting a reference, it is very difficult to motivate them to avoid further damage.
Let me know if you have any questions.
Fuck corporate landlords, but it’s hard when you are in this position and actually trying to do right by people only to get fucked.
Be strong mate and stick to your 90day notice.
Move into the house and get all the issue fixed.
Make a list of things which need fix and organised tradies accordingly.
It’s not easy to be a landlord. But hang in there and you will be on good side.
Good luck .
Buying a home has been really shit for the last 5 years and thats why have stayed out. It has been financially unwise and absolutely is right now too.
It does sound like you will be better off to move back into your own place and then get flatmates.
Sorry to hear about your shit tenants. Not all tenants are like that.
Good plan. Way easier to supervise FlatmateÔÇÖs.
>I have a tax bill on my negative cash flow (thanks government).
It is challenging being a landlord, you have my sympathy.
However “paying off your own mortgage” is not a ‘loss’. It’s more akin to putting money in a savings account (because you’re gonna get it back one day when you sell the property).
So please refrain from claiming that you are making a ‘loss’ based on having to pay (some of) your own mortgage, or that the government is somehow being unfair. You have a responsibility to pay tax on your income just like everyone else does.
What youÔÇÖre beginning to see is the unraveling of a ponzi scheme. All the best Ô¡É´©Å
Yeah, wow. You shouldn’t be a landlord!
Move in and enjoying being a homeowner.
Or sell if that doesn’t work out ƒÆ½
Had a similar situation, moved back into house, it is a large place. Now have my mum and forever single bachelor brother living with me, my wife and children. It’s been going well, 4 adult incomes, haven’t lived with my mum since I was 17 ƒñúƒñú they have the upstairs we have the down. Might be like this forever just to afford the place.
Sounds like moving in and getting flatmates is a good move for you. You should be better off and able to save money by arranging repairs yourself and not paying an agent.
Ignore the haters, It’s good for these stories to be told.
If you buy an investment property, buy new and sell after five years so you don’t get hit when everything starts to wear out and break.
Seems like the right move to do.
Move in, you save over two hundred per week there.
Rent out each of the two bedrooms at $200-ish per week.
Boom! You’ve now matched the rent you want from her.
But with much less stress, less costs, and less damages done.
If you can’t afford it, then sell. Landlords do not deserve any sympathy
Why don’t you kick them out, move in and get flat mates, no different to what you are doing now flatting but will be in your own home so your paying your own mortage not someone else’s like you currently are so that’s a few hundred, not to mention flat mates would mean you can split your power bill, internet etc. Plus then, their payments go toward your mortgage, and you live with them, so you don’t need property manager expenses as you sort shit out yourself since you live there and keepnit tidy etc.
It’s hard for all landlords.
You get a different picture on reddit because there are alot more loud poor idiots on here – not unlike your tenant.
But this post….. alot of it is due to your own fault.
First of all you bought a house when you didn’t have the means to do so.
Second you allowed pets, despite the agreement stated otherwise
third clearly your rent is off. 2% increase vs 2019 prices? WTF even rates increased by 7.7% along. you have no one to blame but yourself. Instead of being lazy look up current market rates and increase it to what it should be…… except you can’t now because you can only do it once in 12 months.
You kicking them out by moving in yourself is the only logical thing I’ve seen in this entire post.
Yea land lords have it hard I spend less on myself than I pay tax. But at least I do it right. You are the cause of your problem based on the information you provided
Good luck my friend forget the haters you are a normal everyday compassionate kiwi. This government for political reasons has created a hazardous environment for landlords. I am in a similar situation myself. I am about to have to evict a perfectly good tenant just because they had a baby. you see under the new law that labour brought in technically my house is overcrowded .like you I had kept their rent down because of the cost of living crisis I couldn’t justify putting a family into poverty.
I have just received my insurance and it has doubled in cost, my rates have gone up to $4000 a year. Then I had to remove a perfectly good heat pump and install a bigger heat pump because of government regulation. yet the tenants have never turned it on because it uses too much power. That was another $9000 wasted dollars.
I now have to put up there rent by a round $150 a week just to get back to breaking evin ,assuming that is the tenancy tribunal doesn’t hold me accountable and refund all of their rent because of overcrowding.
Basically what I’ve learnt iafter reading up on numerous tenancy tribunal rulings Is having compassion is an expense you cannot afford. As a landlord you have to be as hard as nails and go for every dollar you can screw out of a poor tenant regardless of their situation.
It would appear to me that compassion is a crime.
Is that $42500 including payment to the principal of your mortgage?
My man. YouÔÇÖve got to be hard sometimes.
When I moved back into my place I had to kick my tenants out. They asked if they could be excused from things (carpet cleaning, other cleaning etc) because they were ÔÇÿlow incomeÔÇÖ. Everything that would usually be expected of them ÔÇÿoh please no, weÔÇÖre low incomeÔÇÖ. IÔÇÖm convinced the guy has internalised it so much itÔÇÖs just a go to excuse in life. Oh can we not have to pay xyz, weÔÇÖre low income.
The dad also said the mums dad had just gotten cancer too, which I found out was a lie later on.
So I move in and theyÔÇÖd barely cleaned. I asked for 50$ from the bond to buy and they ÔÇÿwere disappointed it had come to thisÔÇÖ. IÔÇÖd been a decent landlord, looked after concerns, got stuff installed, under market rent.
IÔÇÖm the end when i signed some paperwork infront of them I told them thanks for paying 80% of the mortgage, now get fucked.
ItÔÇÖs just as hard to find good tenants than it is to find good landlords.
Why not sell it? just curious
ItÔÇÖs hard! YouÔÇÖre making the right moves. Renting out your first house is one of the first times you are exposed to managing a service for people and trying to match their expectations. Turns out a large number of people make your job as a landlord harder! With the responsibility of being a landlord comes this struggle and additional stress. A property manager is a good option if you are happy to lose their cut of the rent, or you can be much more selective with your next tenants to choose someone easier to look after. Good luck!
oh no. your high risk investment isn’t working out how you wanted it to. boo hoo.
I’m normally pro-tenant, but these guys sound like they have taken advantage of you.
If they kick up a storm when you serve the eviction notice, you can tell them:
You actually only have to give 63 days notice because you’re moving in yourself – you’re choosing to give 90 for their sake. You can blame the laws, and say you get taxed for having tenants and won’t get taxed as much when living with boarders. You also have not found the experience of being a landlord a great one, and as you are on the hook for the expensive mortgage you would rather not be a landlord without living there yourself.
Move back in yourself and fill the other rooms with flatmates.
You have far, far more rights as a landlord when cohabitating, and you only have to give 63? (Was 42 last I looked but I know it’s gone up) days notice if you’re moving yourself or family back in.
Property ownership is definitely just free money like the commie shitrags make out.
is this a shit post
God, it must be so hard having someone else pay off your mortgage while they can’t get theirs and pay off their own.
You deserve everything you got.
Meanwhile I caught my tenants importing illegal cigaretts from china and they also have a dog. I gave them a warning about the smokes. I havent raised the rent since they moved in a couple years ago. Still love them and their dog though.
Should be able to interest deductible 50%
Always get a property manager!
Sorry mate but this isnÔÇÖt an investment property, this is a deadset liability. The only way you can benefit from this situation regardless of how you got here is living in it and leasing the spare rooms. Sell when the market is up
What a sad situation. Whatever you do I suggest you get clued up on retaliatory notice, look it up on the tenancy website and previous tribunal orders.
ETA: if you decide on terminating the tenancy, please use the correct notice periods/reason too so your notice is valid. The tenancy website has a calculator for periodic vs fixed, reasons for terminating etc.