Are you thinking about buying investment property? If you do it right, with professional mortgage advice and a sound plan in place, it can generate wealth for you on two important fronts. Firstly, building equity in property gives you a solid financial foundation for later in life. Secondly, positive cashflow property is basically an extra income stream!
But being a landlord means taking on a certain set of responsibilities. The New Zealand government just passed a new set of laws that will impact how you handle a rental property, so let's have a look at those and make sure you're up to speed.
On December 8, Housing Minister Nick Smith announced the new Healthy Homes Guarantee Bill had passed through parliament. It focuses on upholding standards around heating and safety in rental properties, including the maintenance of smoke alarms.
"Smoke alarms will also need to be installed in all residential rental homes by 1 July next year," said Mr Smith. Landlords will also have to be responsible for ongoing smoke alarm maintenance, but it's up to tenants to report any faults in the alarms. It's a simple switch, and shouldn't be too hard on your wallet - the cheapest available at Bunnings is $11.50. However, it's an important responsibility to be aware of.
The other major part of the legislation is changes to insulation requirements. From July 1st, you'll have to outline the exact level of insulation in your rental property, and from the same date in 2019 there will be requirements regarding how much insulation you have.
That's plenty of time to organise any changes that need to be made, and the media release also says it will be "heavily subsidised" by the government.
"This is an important, practical Bill that will make homes warmer, dryer and safer for tens of thousands of New Zealanders without imposing unreasonable costs," Mr Smith added.
Statistics NZ notes that by the 2030s, about 22 per cent of the population will be 65 or over. Healthy homes help to take care of our ageing population as well as young families, and bills like this should keep everyone up to speed. If you're calculating a home loan for investment property, it's another few checks and balances to tick off when you're selecting the right real estate.