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When it comes to investing in "safe" property, a bite-sized slice of the so-called 'risk-averse' property investor population out there may be kicking themselves all the way to their nearest WINZ "Emergency Benefit Counter" in a wee while… because what appears to be safe "just aint safe no more!"

Let me explain…

I read an interesting article in the NZ Herald this morning — all about a well-known listed property trust's 'struggle for survival' due to rising vacancy rates and falling rents.

The Listed landlord National Property Trust has declared a 2.2 million dollar loss in rental revenue due to the under-renting scenario it's experiencing in the current climate. Roughly half of this amount is due to vacancies, with the balance due to depressed rents.

The total portfolio value (around $269 million) has lost just under 10% of it's market value over the past 12 months - that's a whoppping $28 million!

Plus, they expect their vacancy rate to climb to an ominous "11.1%" within 12 months - hardly an exciting prospect for the thousands of Kiwis currently invested in the Listed Landlord National Property Trust.

I think this scenario serves to highlight the frailties and 'hidden risks' associated with investing passively in property - you simply don't have any control over your own investment! Plus, there are no guarantees in place as far as the rental streams are concerned - you're literally at the mercy of the property markets.

At Compass Property Investments we steadfastly encourage our clients to invest DIRECTLY in residential investment property, as long as the property is well-managed and protected with both rental guarantees and landlord protection insurance.

This way, no matter how ugly the New Zealand property market becomes in the short term, your cash-flow is preserved with the market-aligned rent guarantees… and every aspect of the day-to-day, week-to-week, month-to-month management of the property is handled by our property management division.

I think that there is a place for passive property investment - but certainly not the way it is structured in New Zealand.

If you'd like a more in-depth discussion on this and/or other property investment issues - and perhaps an "inside look" at how we can help you remove a huge chunk of the risk from rental property ownership, call me directly on: 09-966-2860… I'd love to hear from you