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(Image: Tina Tiller)
(Image: Tina Tiller)

OPINIONBusinessOctober 29, 2020

I used to think all landlords were rich – until I became one by accident

(Image: Tina Tiller)
(Image: Tina Tiller)

Landlords are often denounced as wealthy, cost-cutting investors by the tenants who rent their houses. However, as Ayla Miller writes, it’s not as simple when you’re suddenly handed the keys as an owner.

Inheriting a house at 27, when I never dreamt of home ownership, almost seemed like a waste. There were so many other people out there desperate to own their own home. Yet here I was eating avocado on toast in my childhood kitchen, signing on the dotted line. This was a millennial’s dream. But not mine.

Becoming an accidental landlord had come at the expense of losing my mother. Regardless of how this fate had befallen me, I couldn’t live in the house and I wasn’t ready to sell it.

So I hired the first property manager who returned my calls.

Before my name was ever on a deed, and after joining one too many millennial-heavy meme groups, I subscribed to the widely held belief that all landlords were rich, greedy boomers.

That was, until I thought about it some more. If I’d unexpectedly been landed with a house, then there must be others out there in the same situation. According to New Zealand Property Investors Federation executive officer Sharon Cullwick, there are a lot more accidental landlords than you might expect.

There are 190,000 private landlords in New Zealand and 90% of those own only their own homes plus one other. So I would say a lot of those would be accidental landlords,” she says.

“Often it’s the bug that gets them started. They’ve got the equity which they can then use to purchase more.”

Statistics New Zealand reported in July 2020 that one out of every three households are rentals and overall, tenants are less satisfied with their housing compared to home-owners.

I’ve been paying rent since I was 18, and over the years, I’ve had an assortment of landlords ranging from ones who left fresh produce outside my door to ones who refused to do the most basic maintenance.

A few months into renting out my newly inherited house, the property manager advised me of the work required to meet the Healthy Homes Standards. I was faced with my first decision as a landlord: to continue maintaining the fireplace as the only source of heating (cheaper but less economical) or to install a heat pump (initially more expensive but much more convenient).

I chose the fireplace.

Luckily for the tenants, the fireplace was later condemned, and a heat pump was installed anyway. But my initial reaction was a shocking demonstration of how easy it is to forget, even if you have experienced life “on the other side”.

I had thought that being a tenant at the same time as being a landlord would make me better at it – more compassionate. In reality, it highlighted just how quickly money can bring out the worst in people.

A particularly sardonic anti-landlord meme (Photo: Supplied)

Sort of accidental landlord, Valeria Maw, also found herself making significant decisions about a home she wasn’t expecting to rent out. The Matakohe farm she owns with her husband and his family came with a spare three-bedroom farmhouse. Aware of the housing shortage, especially in Northland, she felt putting it to good use was almost her social responsibility. 

I saw a post on Facebook from a young mum who had a three-week old baby and she was desperate for a place to live,” she says. “Even though I didn’t really want to rent out the house, I felt I could help her. She had been looking for ages and there was nothing around.

I knew from day one it wasn’t going to be a money maker and if I was lucky I would break even. If I was unlucky they would trash the house.”

She believes the Healthy Homes Standards means rent for low-value houses owned by mum and dad landlords will have to go up, making it even more difficult for tenants.

I’m getting $350 for that house,” Valeria says. “Which is a lot for Matakohe, but it’s barely covering all the things I have to do [to meet the standards]. I don’t want to put up the rent and I’m not going to because I’m a softy, but I should really ask for $400 a week just to pay for all the expenses.”

A member of the Property Investors Chat Group on Facebook – another fellow accidental landlord and current tenant – agreed with Valeria’s sentiments.

The woman, who didn’t want to be named, rented out her own home when she moved in with her partner but says she isn’t making any profit off it.

Rent just covers the mortgage, most of which is on interest only. I then pay for rates, water rates, maintenance and insurances on top.

The main reasons for keeping it despite all that, is it gave me a place to go if my relationship had not worked out and no one is making any more land. If I decide to sell one day, then it will be worth it.”

As for me, now that I’ve seen life from both perspectives I’ve come to realise it’s a case of not hating the player but hating the game. Maybe the particular group of landlords that millennials love to criticise would more accurately be described as property investors.

They’re the 10% who own more than two houses and who certainly could not be called the average mum and dad landlords.

As a society, perhaps we need to examine the role of landlords further. Are the systems in place encouraging compassionate behaviour? Should they have to? Or is there something inherently flawed about the rental market?

In the meantime, I’ll continue scrolling through these anti-landlord memes and exclaiming “eat the rich!” – even if it’s mostly directed at myself.

Keep going!