Landlord says to rent - as he does

Tim Duffett. Photo / Dean Purcell

An Auckland landlord with 19 properties recommends people rent - because even he is a tenant.

Tim Duffett pays hundreds of dollars a week for his three-bedroom Castor Bay house overlooking the sea and says he used money from his original family home in Hillsborough as the seed capital to buy his portfolio.

He backs economist Shamubeel Eaqub of the Institute of Economic Research who yesterday advised people to rent because paying the high prices now being demanded made no economic sense.

Instead, people should save and invest their money elsewhere and they would end up far better off financially. Mr Eaqub made his comments after Barfoot & Thompson announced a record Auckland average sale price of $618,707 last month and said it had also sold a record number of $1 million-plus houses.

Prices are well above 2007 levels and the Government last week announced its response to the Productivity Commission's housing affordability inquiry.

Mr Duffett said renting was by far the best way to go, as long as people could save and use that to get ahead.

"I've been renting since 2007 and it's the right way to go," said Mr Duffett who also owns houses in Las Vegas.

"I've been able to grow my portfolio in a way I could not have achieved if I'd owned our own family home because my capital isn't tied up. It creates options. I used money from one house to buy the next. I always buy distressed real estate, never at mortgagee sale because it's too late. You jump in as the white knight, negotiating with banks directly but usually I'm talking with vendors who are in the early stages of distressed sales situations," he said.

"In the last 12 months, I increased the portfolio by four rental units in Auckland and seven in Las Vegas," he said. The United States was a far better place to buy than here because it was cheaper and rents were higher.

Mr Duffett challenged David Whitburn of the Auckland Property Investors Association, who said this week the choice of whether to rent or buy was personal.

Tenant Mike Jefferson, father of three and renting for the last 10 years, had awful experiences.

"Every house was promised to us long-term. Three times now, the house has been put on the market and sold, leaving us with the horrible task of finding a new place to live," he said.

Finding the right sized place close to work and school was daunting, too.

"On top of this you are also faced with the tremendous cost of shifting. We were forced at one stage to accept a house which was dangerous, as in winter it was terribly cold and damp." They managed to find another house just around the corner that was promised long-term.

Just eight weeks after arriving, that place was put on the market.

"It makes you feel like a prisoner in a house."