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Residential real estate specialist Merlot Property Investments has told clients it is having problems with rent payments because of the difficult economic environment.
Merlot, which has its headquarters in Auckland, has about 300 investors who bought about $100 million of rental houses through the company, which offers financing packages.
The business then leases their places, rents them to tenants and pays the owners a fee.
Merlot directors have written to investors warning of rent payment problems.
"Life is pretty difficult at present for all of us and some investors have had rental payment instability and this has meant that rent has been paid on different days of the week over recent times," Merlot said.
"We appreciate your support through this period and assure you that it is our commitment to you, that we will be making up these payments as soon as is practicable and intend to return to weekly in advance payments shortly," Merlot directors said.
Merlot clients mainly use equity in their family homes to borrow. "The smart way to increase wealth is to put the money you already have to work. This is known as financial leverage. The assets you own now are the key to having more choices later in your life," Merlot tells its clients.
Merlot asks what is standing in investors' way when they are working out how to get ahead financially.
"The simple answer is doubt. Something in the back of your mind prevents you from investing, who to trust and when to make the move. Confusion, perception of risk and procrastination are the barriers stopping you from building long-term wealth and lifestyle you want," Merlot says.
"Merlot Residential becomes your tenant, taking a three-year lease on your property. Rent is paid to you in advance by direct credit every Friday, after charges for management are deducted," the business says.
Merlot's bosses are Stewart Goldstone, Grant Petrie and Rick Hughes.
A Merlot investor complained to the Herald this month about late rental payments and said he was owed about $5000.
Olly Newland, working with many Blue Chip investors, questioned the situation.
"Merlot buys ready-built off developers then on-sells and leases places to investors and manages them too - very average properties in working class areas. Why have they run out of rent? They must have been relying on sales and profits from sales to shore up the rent flow."
But Goldstone said he expected all investors had received their rental payments up to June 6. Letters would go to investors early next week, he said. Reasons for payment delays were mainly vacancies in the property portfolio and rising interest rates on finance Merlot had for its land bank.
