Arpit and Hinal Patel, pictured with son Shivansh, were ecstatic when their landlord offered them the chance to buy their rental flat. Photo / Supplied
Arpit and Hinal Patel arrived at a small, Far North unit in 2017 simply looking for a rental.
Yet, as they stepped inside the Kaitaia flat, they were actually walking into the first home they would ever buy – they just didn’t know it yet.
That’s because they had chosen to rent from Jane, a landlord passionate in her belief that property investing came with social responsibility.
Jane, who didn’t wish to give her last name, welcomed the young couple in, kept their rent the same price for the next four years, and recently offered them the chance to buy the flat from her at a small discount.
Arpit said Jane hadn’t needed to sell. She only offered because she wanted to help him get ahead.
“She said every family deserves a house, that is why she sold. She only did it for us,” he said.
Arpit and Jane believed the sale they settled last month
was just one of many – often unheard – instances of tenants and landlords happily working together.
But it also came as skyrocketing house prices had again raised tense questions about housing affordability.
National house prices hit a record high $826,300 in April, more than 20 per cent higher than when the Covid pandemic hit in March 2020, according to the Real Estate Institute.
In March the Government targeted property investors with new taxes in a bid to discourage them from buying.
That included increasing the bright-line test to 10 years and preventing investors claiming interest paid on home loans as a business expense – a benefit that typically helped lower their taxable income.
Investors argued the changes could make property investing unprofitable, and lead many to either charge their tenants higher rents or sell up, causing a rental shortage.
They said investors performed a valuable service providing houses to other Kiwis, yet the changes unfairly subjected them to taxes other businesses were exempt from.
But Hamilton-based investor Jane told the Weekend Herald, property investing was a different type of business.
“I believe as landlords we should have a sense of social responsibility that we can’t make ourselves rich on the back of somebody else’s hardship.”
Some of the attitudes publicly put forward by other landlords and lobbies made her “cringe”.
“I think, ‘Don’t you dare speak on behalf of me’, because I’m horrified by some of the things they preach,” she said.
Now owning five Hamilton flats, she bought her first two for $185,000 each 12 years ago. They had grown in value to about $390,000 with “minimal investment in between”.
Despite keeping rents “well below market rates” and granting one tenant substantial rent relief after they lost their job just before Covid hit, she called her investments “easy money”.
“Should I sell those flats tomorrow, I’d make over $400,000 in tax-free profit.”
Jane said she supported the Government changes axing tax deductions on mortgage interest payments, but wished they also included controls on how much rent could be increased.
“A friend on a sickness benefit recently had her rent hiked $60 per week. The landlord can do that without justification and she is powerless to intervene,” Jane said.
Jane’s Kaitaia flat, meanwhile, had been giving her one of her best returns on investment, she said.
She originally bought it for a friend considering moving to Kaitaia, but when the friend’s circumstances changed, rented it to Arpit and wife Hinal instead.
Arpit arrived in New Zealand from India in 2014, seeking a better life.
To help secure his visa, he soon moved from Auckland to Kaitaia to work in a superette.
Later, joined by his wife, the couple had son Shivansh.
It was not long after that Jane first offered the young family the chance to buy the flat.
“Interest rates had come down and, although he is on a humble income, he thought this was his opportunity to buy,” she said.
However, Arpit was not yet a New Zealand resident and so was barred from buying.
So he and Hinal kept their nose down, kept saving.
Then with residency in hand, Arpit came back to Jane: “I’m ready to buy.”
Jane had earlier paid $130,000 for the flat. She asked the real estate agent who originally sold her the flat what they thought it was worth now and they said $230,000.
Sharing that with Arpit, she asked him to make her an offer.
Arpit suggested $210,000. They shook hands.
“As a landlord, I have all the advantage but I’m grateful I could share it with the tenant on this occasion,” Jane said.
Arpit, meanwhile, couldn’t wait to share the news with family back in India, including his dad, who had only been able to buy at age 50.
“I’m only 31 and I’ve got my first house,” he said.
“My dad said, ‘You bought your first house before me’ – he is so proud.”