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Mum & Dad Property Investors Can Now Move Forward

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Contributor:
Brian Dalley
Brian Dalley

Mum & Dad Property Investors can now move forward and take advantage of great opportunities in the market place as Housing New Zealand opt to retain their lease program to house the less fortunate.

Although a fantastic passive investment, it can be a little boring as there is really nothing to do apart from watching the asset column grow as debt is paid down.

John Key has signalled in his address to parliament that he doesn’t what to single out property investors, but rather plug the loopholes in the tax system and what is wrong with that?

Some Investors are now saying that as they based everything on what they could skim off the top, they can no longer afford their investments because now they have to make money, (just like any other business) as the cream is about to evaporate.

I have been telling investors for years, base your figures on income and expenditure and treat deprecation and the tax breaks as icing on the cake as one day the government will wake up and you will be left with nothing but the cake.

I guess that day has finally arrived.

But hey, you still have the cake and that should have been how you structured your business. The goal should have been to end up with a freehold income-producing asset (the cake). Capital gain, tax benefits and anything else up for grabs should be viewed as icing, just added benefits, not the only benefit.

I must say I do find it a little hard to understand how a building doesn’t depreciate in value and would have thought the tax right off against personal income would be at the forefront. Hold that thought though, it’s not over yet.

As an investor, I don’t really have a problem with that so long as the business can be run on the same lines as a limited liability company. Really, it is just back to square one.

Don’t listen to those fools that are screaming from roof tops (within New Zealand) that we would be better off across the ditch... A little hypercritical don’t you think.

Did you really think they were going to behead those that are currently buying new housing to lease to them (the government)? Remember; in this way it is win, win.

By investing in purpose built property for housing New Zealand, it doesn’t affect the property market in any way, creates employment, and houses those that would otherwise be living in substandard accommodation.

Before gritting your teeth and screaming I am sick of this one eyed Dalley guy, read John Keys speech (with and open mind) and think for a while. You may just decide to agree. Don’t just get on the band wagon with others that have their own axe to grind.

Brian Dalley is a leading Property Consultant | former NZMBA Mortgage Broker, and Real Estate Agent.  You can read more of his views and opinions on his website http://www.propertyprofit.co.nz.

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