But, says Tony Clarke, managing director of Rawson Properties, if it is at all possible, they should hang in there and bear the pain.
"Looking at our investor client base, some of whom own a dozen or more units, it is clear that those who have taken the long term view and ridden out interest rate fluctuations, have ended up in a very strong position.
"Although it is impossible to generalise, we estimate that most new investors in the middle and lower middle brackets under the new conditions still cover their monthly bond repayments in three to four years. Thereafter, their investments become steadily more profitable."
Clarke said most rental agreements still have a 10% per annum escalation clause and this quite often results in market-conscious tenants leaving within two years to find a cheaper rental – which is often possible with the new units still coming on the market.
"The good news is that it has almost always been possible to find new tenants within a month or two – or to hold onto the existing tenant by agreeing to a smaller rental rise for a year or two."
For more information contact 021 658 7100 or send an email.
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