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The makings of a good rental investment

Property Management

Property Brokers 25 Feb 2021

Themakings of a great rental investmentSo, what exactly are the makings of a good experience for tenants and owners? Is it attainable? Is it fair to assume that the vast majority of rental experiences in New Zealand result in disaster?

Well, currently, there certainly seems to be a feeling of 'us and them' lingering within the industry. We only need to look back to the lockdown in 2020 to recognize that this couldn't be farther from the truth.

The recent reforms to the Residential Tenancies Act are all about raising the standard of rental properties in New Zealand, and it will only strengthen the industry. Daily, we see great exchanges between owners and tenants, and there's an undertone of respect for each position.

 

"I would only rent a place that I would feel comfortable living in. That's my minimum standard".

 

Across the property management industry, this opinion is commonly held by the vast majority of investors who rent out residential properties.

No matter the property or the location, here are some of the key attributes that result in a great landlord and tenant relationship.

 

Landlords:

  • If you wouldn't live in it, then it probably shouldn't be rented. It is a simple benchmark, and although everyone has different standards, a lot of the discretion has now been removed with clear guidelines imposed by the Residential Tenancies Act.
  • Yes, when you move out of the property that you have occupied for years, those little breakages or things that don't work (that you have tolerated for years) will need to be repaired. And, there will, more than likely, be more than you remember. 
  • There are two reasons why a property isn't rented within a few weeks. The rent is too high, or there is something wrong with the property. It's rarely anything else. 
  • Don't cut corners with compliance. It's not worth the hassle, and eventually, it will catch up with you. 
  • A well-presented property's subtle effect when leasing it to a new tenant sets clear expectations going forward. 
  • Leaving whiteware in the property for the tenants' use but then writing in the tenancy agreement that they won't be replaced in the event that they happen to break down. Well, in short, that never ends well. Either look after them or do not leave them in the property! 
  • We all lead busy lives, and if you rent a property with an extensive landscape, it tends to be more advantageous for all parties to factor this into the rent before advertising the properties. 

 

Tenants: 

  • Tenants, just because they are landlords, don't assume that they have bucket loads of money. We see a wide variety of investors, and some of them probably have less available cash than you and need your rent as much as you need a property to live in. 
  • Tenants, don't try and maintain the pool. Unlike renting a property, this appears to be quite a science, and we can confirm that it hardly ever ends well.  
  • Don't ever be afraid of reporting maintenance. The vast majority of landlords want to know if there is an issue and want to fix it quickly. You won't get kicked out!  
  • Tenants with pets, if the owner is gracious enough to allow you to have pets in the property, although you don't have to, do the right thing, and get the carpets professionally cleaned. 
  • Despite what many tenants may think, most owners don't want you to move out and are always very considerate when the rent is reviewed and increased. The majority of investors like the stability and continuity of a long-term tenant.  
  • Using the lawn as a parking lot always ends in mud. Keep it on the concrete. 
  • We're aware that you feel the property is cleaner now than it was all those years ago when you moved in. If you don't have a copy, request the entry inspection report to ensure everyone is aligned here.  
  • Bond refunds – it is not the mission of a property manager to deduct costs from the bond. It creates a lot more administration, and anyone in the industry will tell you that their clear preference is to refund it straight away and move on.  
  • If there isn't a kennel for your pup, then the reality is that the dog sleeps inside! Unless prior agreed, respect the terms of the agreement. 
  • When there are two people on the tenancy, but there are five toothbrushes... let's just say, it's a dead giveaway. 

 

Although the lines can become blurred, renting properties is a business transaction at the end of the day. Landlords provide a product, and tenants are the consumers.  

And, with the average rent in New Zealand equating to roughly $470 per week or $24,440 per year - it's fair to say that anyone annually paying tens of thousands of dollars deserves to have a good experience. 


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