Hello and welcome along to the probably Academy podcast. I'm your host Kate McKnight and I'm Andrew niccol and today on the show. We're going to talk about the ethical argument for property investment by mum and dad you investors in New Zealand. And the reason we're excited to talk about this specific topic today is I checked the podcast stats last night looking at the top shows Within. The business category of podcasts in New Zealand and I was I almost couldn't believe my eyes because this podcast the property Academy podcast is currently ranked number one in New Zealand among all business podcasts. And so I'm feeling very very lucky and grateful actually to everybody listening to this show who's helped us get to this to get to the stage to be among or or above actually some people that I really admire like Gary V or Tim Ferriss and and above Rich Dad Poor Dad show is really fantastic. And I think the good message here as well is that you zealanders are interested in property and are interested in putting themselves in a better financial position through property and I want to thank you Andrew as well for sitting across the table from me. So many times almost every day and recording these shows as well. So let's get into the ethical Arguments for property investment and Andrew this came through one of the reports from the one roof property. Report that came out for the last quarter of the year and there were some really interesting stat. What was that? Sorry, I didn't have that set their head. I was throwing it to him. I don't get good Tate. It was that 440,000 of the 525,000 rental properties in New Zealand about 80% are provided by the private Market are provided by mum and dad investors. So I did have that step. You know, I need to take his you wrote it down. And I think that this is is something we sometimes forget because cuz property investors tend to get beaten up in the media. They we tend to get beaten up by government policy and so much has happened, you know and being introduced by the government this year to actually make property investment a little bit harder in areas, but actually 80% of the rental market is provided by mum and dad investors and this this is amazing because every additional rental property that is provided by the private Market is an additional house that doesn't have to be built by the government will provide Through social housing and I think we've already seen this year how difficult it can be to provide social housing as well. But that's not the only ethical argument for for property investment that that we are providing these these rental properties for people. What else did you have on your list enter? So what are the things that I think is really important to remember is that often a property investor will make a top up towards owning that property whether it covers the rates or the insurance or but towards the mortgage all these kind of things. So we we are as landlords often subsidizing People's rent. So we're making it more affordable for someone to go and read to house and it is most often that people are actually making a top up and as you'll remember the government took away the ability to offset that loss against our personal income. So now it's costing us more in the pocket each week and that hasn't really flowed down to tenants just at the moment. But yeah that I think that's a really important thing to remember. I also think about about the the kind of Is the our clients Often by which is generally new or newish properties and I think that's providing a better quality home for a lot of tenants out there. So Christchurch post-earthquake, they've been a lot of earthquake damaged houses which have been rented out but really aren't fit to be lived in and it's not safe for people and they're not warm and that's not really a great great situation to be in and so by buying something new or newish you're providing a really nice home for someone. Totally agree and and just following on from that that light and or train of thought as well Andrew, but if you are buying a brand new property, you'll usually buying it off the plants. So you're buying it off the plans from a developer and what that means if a whole heap of investors by of the plans, is that more developments get off the ground and so we're increasing the housing Supply as well. So we're providing even more homes and bringing them onto the market. Now the flip side of that is well, is that if we have investors Who are flying off the planes from developers then because more developments get off the ground more owner occupiers are able to buy their own home as well because if the wound investors and they're all of the all of the developers properties would have to be sold to owner occupies. And that's a much more difficult task because then you've got a more limited market. So by having investors buy off developers as well more owner occupiers are actually able to get into new properties as well. Also, I just kind of think about the long-term goal of property which To build wealth through Capital Growth and so most often clients are doing that to kind of provide an income later on in retirement. So by doing that by taking some responsibility yourself and getting into property investment, you're putting less Reliance on the government superannuation later on down the track. So I think that's a really important thing as well the fact that we're actually investing in property to be able to rely on ourselves rather than the government and it's so it's so important because it's not necessarily the government's role to completely sort out everybody's Uber and uation and make sure that every retiree has maintains the lifestyle that they currently have and it is our responsibility to sort ourselves out for retirement and actually make it happen for ourselves. And the last thing that I was going to mention as well is that that because we're all getting into property investment or if you do get into property investment, you are increasing that housing Supply and which if that didn't happen then prices would increase Even further than they already were so every time a new house has brought onto the market. It actually softens prices more relative to what it would be if that house wasn't built. So if property investors weren't investing in new properties and or or re renovating Old Stock and bring it up to a new standard then there would be fewer houses available and the prices would be increasing at a much faster rate than they currently are. So rather than saying this is so terrible because you know a property and Basement is terrible because it increases the price of houses actually because investors whether through renovation or investing in new properties adding more stock into the housing market. It's actually helping keep prices lower than they otherwise would be for owner-occupiers. So on that note we're going to go polish our Halos ha ha ha. Hey, thanks so much for listening to the property Academy podcast. We really really do appreciate that. You're with us on this now, please don't forget to rate review And subscribe to the Podcast that's going to help us maintain this number one position in the charts and get the message out to even more people than would be able to and look if you do want to learn more about property investment with Andrew and I then why not check out one of our free online courses, you can go to Opus Partners dot coded in C. That's ope is Partners dot coated in said where you can we have a video course called the property Academy there as well and it's completely free course 15 videos there where you can learn about property. Thanks for listening to the property Academy podcast. I'm your host hematite and I'm a juridical have a good to be back again tomorrow with even more daily strategies tactics and insights to help you get the most out of the New Zealand property Market until next time.
In this episode, we attempt to dispell the myth that property investment is undesirable for New Zealand (or any country). There are several reasons why we believe that property investment is good for the country:   440,000 of New Zealand's 525,000 rental properties are supplied by Mum and Dad investors (the private market). Every additional property that is supplied by private investors is another house that the government doesn't have to provide. This saves the government spending enormous amounts of public money on housing  Many residential properties are negatively geared, which means that the investor is putting money into the property each week, and the rent doesn't cover all of the expenses associated with the property. This means the investor is effectively subsidising the tenants to live in the property   The reason many Mum's and Dad's become property investors is to sort out their own retirement. By investing in property they are taking responsibility for their own retirement, which places less burden on the state   When property investors invest in brand new properties they help more developments get off the ground. If property investors weren't in the market then developers could only sell to owner-occupiers. This would shrink the market for development and would mean that fewer houses would be built, and they may be more costly, both to get off the ground in the first place and because of economies of scale   When property investors bring new houses onto the market – whether through building new developments or renovating run-down properties – the supply of housing increases. This decreases the price of houses, relative to what they would otherwise be. 