What Charity are you Supporting?

Many landlords are happy to take less than market rent from their tenants because they are doing them a kindness, they like the tenants, and they don't want to be greedy, and they don't want their tenant to move out.

These are wonderful and admirable qualities.  It does tend to result in very long term tenancies, as lets face it, who wants to give up a very sweet deal?  Tenants are well aware of where their property sits compared to similar properties, and know when the rent is very good compared to others.

I know a tenant who has a four bedroom home in the Capital city who pays a mere $200 per week, when market rent is over $650 per week.  How long has she been there?  15 years and counting.  Does the tenant know how much she'd need to pay if she moved out?  Yes, she's well aware she'd need to pay $350 for a one bedroom place, let alone what four bedroom is worth.  This happens a lot more than anyone wants to admit.  It's a lot of support landlords give their tenants.

I wonder though if the support landlords give their tenants could be better used elsewhere.  Supporting more causes, doing greater good.  Making the world a better place.

Lets look at this in a bit more detail.  If you rent your property to someone for $50pw cheaper than the neighbours rent an equivalent property, you are effectively handing your tenant a gift, tax free, of $2,600 per annum.  Over 10 years that's $26,000, or with compounding interest at 7.2%, closer to $50,000.  That's a lot of money!

What could you as a landlord do with that money?  What does your tenant do with it?

How many 'One Dollar a Day' charities could that support?  Answer: 137 families fed and lifted from poverty.

How many families are supported when a landlord discounts their rent?  Answer: 1.  What do they do with it?  Who knows!  It could be supporting a charity, or it could be spent at the pub.  It's not in your power to choose.

$50 per week would make a huge difference to an animal shelter, protecting wildlife, feeding kids good food, clothing those who need it, programs for disadvantaged youth, researching cures for disease.  There are lots of great uses for your funds surplus to your requirements.  Why would you not want to be in control of where it goes?

Now imagine how much that would be if every landlord of the estimated 300,000 rental properties in New Zealand did the same.  

How much good do you think three quarters of a billion dollars do?