Wednesday, July 17, 2024

Property backed Peer-to-Peer Investments

Heather Kentsley, Southern Cross Partners

New Zealand investors have had a love affair with owning and investing in property for many years and there are whole industries that have evolved around property investing. However, in today’s increasing interest rate environment and regulatory climate, some landlords may question if this is the best investment strategy for them, writes HEATHER KENTSLEY, investment manager Southern Cross Partners.

 

Heather Kentsley, Southern Cross Partners

By July 2024 every rental home is required to comply with the new Healthy Homes minimum standards which became mandatory on 1 July 2019. Landlords are obligated to keep records that can indicate compliance with any healthy home standards that apply (or will apply) during the tenancy.

What could this mean for landlords? Extra expenses and hassles!

The steady rise of interest rates over the last 24 months are starting to affect property investors who are unable to justify the massive increase in rents to compensate for the extra mortgage payments that a higher interest rate requires. This has some landlords reassessing their involvement with property as an investment vehicle.

There could also be financial pressure on residential landlords to make sure their houses are compliant with the new Healthy Homes minimum standards.

Many of our investors have had investment portfolios but are now at a stage in their life where they are thinking more about travel and lifestyle rather than maintenance and tenants.

Property backed peer-to-peer investing has risen in popularity since Southern Cross Partners gained its license from the FMA in December 2016.

There are property investors that still want to be involved with property but don’t want to have the hassles of tenants, maintenance, management fees or the plumbing emergency at 2am in the morning.

Many of our investors have had investment portfolios but are now at a stage in their life where they are thinking more about travel and lifestyle rather than maintenance and tenants.

Owning investment property can have possible capital gains but could also result in capital losses. Property backed peer-to-peer investments, whilst not enjoying capital gains, could provide a monthly income which most investors tell us is important to them.

Every investment has risks, and peer to peer is no different so it’s important to understand the risks associated with any investment product. To find out more visit www.southerncrosspartners.co.nz.

Disclaimer: *All investment opportunities and rates are subject to change and subject to availability. Southern Cross Partners Ltd is licensed to provide Peer to Peer lending services under the Financial Markets Conduct Act 2013. This article is general in nature only and has not taken into account any particular person’s objectives or circumstances. We recommend you speak with a financial adviser before making any investment decisions.

Related: Is being a landlord still worth it in today’s market?

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