4 Tips for Becoming a Good Landlord

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The rental market has had its peaks and valleys in the past few years. In New Zealand, the prevalence of buy-to-let mortgages has allowed investors to buy homes to rent out. Being a landlord can provide a great source of income and a high ROI, but there are a few things to consider first.

Do the Math

Before starting to look for properties, buyers should decide how much they can afford. If not paying for the home outright,the buyer should talk to a mortgage broker to determine how much they can borrow. It’s also wise to calculate how much rental yield can be expected. Consider costs such as taxes and legal fees, and decide how to handle the property once the purchase is complete. While some landlords go the DIY route, others hire a rental managers in Wellington. Regardless of which way you go,the buyer will need to add these costs into the overall budget.

Choose a Good Location

Once the potential householder knows how much they can spend, it’s time to select an area in which to invest. Choose a rental property in an area where people want to live. For example, a home in a neglected neighbourhood may leave an owner struggling to find the right tenant. It’s important to think of how close the home is to public transport, schools, and conveniences such as shops and malls. If there are plans to rent to students through property managers in Wellington, the owner should think of the home’s proximity to the local university.

Choose the Right Tenant

As previously mentioned, it is important to consider potential tenants, as their needs vary. Renting to a family through residential property management in Wellington is different than renting to a student. While a student looks for a no-frills place to live, a family may need an unfurnished clean slate upon which they can make their mark.

Hope for the Best and Prepare for the Worst

New Zealand’s property market fluctuates, and it can be hard to know if they’ll see a good ROI. Even in popular areas, a home may sit empty for months. As a rule, owners should plan for at least two months per year of vacancy, and budget accordingly. Renting comes with risks, but rental managers in Wellington can help collect rent and maintain the home. For help managing a rental property, you can visit Manage My Rentals at www.managemyrental.co.nz.

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Wellington Property Managers Help Clients Understand the Pros and Cons of Being a Landlord

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Being a landlord is a very popular option for householders who want to generate income from their properties. Many people buy homes as investment properties, and this can be a sound strategy if done well. However, potential landlords should be aware of several things before they hire a property management company in Wellington.

Income

Being a landlord in New Zealand has many benefits, which is why many buy investment properties to start. It seems quite simple, but using property to generate an income is probably one of the biggest benefits. In fact, it’s possible to make enough over time to pay the mortgage on the property.

Tax Breaks

Although a landlord will often pay a higher mortgage rate on a rental property in Wellington, they can apply for deductions on the income used for property maintenance such as furniture replacement, repainting, and electrical work. A landlord may also apply for a deduction on insurance cover and accountancy fees.

Financial Security

Being a landlord can provide a New Zealander with a continuous income that can be saved as a retirement pension or for emergencies. If the landlord’s living situation is changed, they can even live in the home themselves as long as they abide by tenant contracts. Although there are many perks to being a landlord, there are disadvantages to consider.

Time Spent

It can be very time consuming to be a landlord. Along with the time spent sorting rental agreements, performing maintenance, and dealing with taxes and disputes, customers must spend time checking the backgrounds of potential tenants.

Expenses

It is insufficient to have a house for rent. Becoming a landlord means other expenses, not all of which can result in tax deductions. Some of the most common expenses encountered by Wellington property managers include rental income tax, tenancy deposit schemes, energy efficiency certificates, and maintenance and repairs.

Being a landlord has its pros and cons, but hiring rental management in Wellington can help to simplify the process. Manage My Rental can handle every aspect of the process from financial management to tenant handling. For more information, visit us at www.managemyrental.co.nz today.

Questions to Ask Before Hiring a Property Manager in Wellington

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While many householders in New Zealand spend significant amounts of money and time researching neighbourhoods and property markets during the purchase process, they often ignore the role a property manager plays in the preservation of the home’s value and maximisation of the owner’s income when it is time to sell. Rentals are rising and vacancies are decreasing, and many new landlords under estimate the role of a professional property manager.

Many believe they can do it all alone because they do not understand that managing property is about more than collecting rent. If you are considering using property management services to help manage your rental then here are several questions to ask a potential property manager in Wellington.

Does the Agency Have a Licensed, Dedicated Team?

Many Wellington real estate agencies view property management as the “ugly stepsister” to the more lucrative sales department, and some leave clients’ asset management to receptionists and office staff. When evaluating property management agencies, choose one that is professionally and adequately staffed to ensure continuity of management in the event of a staff member’s illness or death.

Is the Managing Broker or Owner Involved in the Company’s Daily Operations?

Some offices have sales and rental departments. Generally, business owners have a background in sales rather than in rentals, and they leave rental duties to property management staff. Rental departments have lower incomes than sales departments have, and they are more labor-intensive to manage. Clients may find that an agency where the owner is actively involved is better equipped to manage their properties.

How Long Has the Manager Been in the Real Estate Business?

This question concerns the manager rather than the agency. Choosing a well-known agent does not guarantee quality service. Some people start a real estate career as a receptionist and gradually move up the corporate ladder. However, others choose a career in property management, and these people are the ones clients should choose to ensure that properties are adequately looked after. By choosing an agent who focuses on property management, customers will get better service.

How Long Has the Agent Been With the Office?

Stability is an important attribute in a property manager. Clients should look for someone who will learn the property from all sides, and they should choose a manager who will be accessible in the long term. Due to the high-stress nature of the property management industry, turnover rates tend to be quite high.

Does the Manager Offer Sample Leasing Documents?

Some managers accept properties with only a cursory inspection. Householders should choose a person who has put forth the effort and time to portray a professional image, and they should ask for written proposals. If the manager makes the effort to present his or her services in a professional manner, it is likely that they will extend the same care to the client’s property.

Which Geographical Areas are Covered?

While clients should choose a manager with knowledge of the Wellington area, they should also consider their property portfolio goals. Some owners start small, while others own properties throughout the suburbs. Here, the client could choose property rental management in Wellington, or they could choose a larger company that serves a broader area.

Does the Manager Provide Keys, or do They Show the Home to Potential Tenants?

If the manager just hands the keys over and allows the potential tenant to self-inspect the property, the client should look elsewhere. This approach can go wrong in many ways, compromising the property’s security. A manager who attends showings with potential tenants has a better chance to promote properties and get to know tenants a bit better.

How Many Properties Does the Company Handle?

Property managers with excessive workloads may not have enough time to devote attention to the client’s property. Some agencies have hundreds of properties per staff member. Smaller agencies have more manageable caseloads and, while these agents may charge more, the extra expense may yield a higher return on the investment.

Are Staff Available on Renters’ Schedule?

The hectic speed of modern life and the 24-hour advertisement of rentals online means that good managers must be ready and available to show the property to potential tenants when it is convenient for the clients.

Does the Company Have a Way to Check Tenants’ Credit Worthiness, Rental, and Employment Histories?

While people should not be judged based solely on their pasts, it is important to screen tenants before approving rental applications. When choosing rental property managers in Wellington, the client should select one with a subscription to a tenancy database.

Will the Manager go to Court If Necessary?

When a client chooses a property manager, they should work to establish a good business relationship with clearly defined parameters. While many of Wellington property managers are willing to go to court, they are not lawyers. Clients should explain their expectations, and they should make it clear what the manager can do without permission.

This step can help both sides avoid many misunderstandings that commonly arise. For instance, if the client agrees to allow the manager to spend up to $500 on maintenance without permission, they should not expect a phone call for every minor problem. Clients should listen to their property manager if non-major repairs and maintenance are suggested.

Many people assume they can perform property management in Wellington, but they fail to see how much work it can be and quickly become overwhelmed. By hiring a property management company in Wellington such as Manage My Rental (www.managemyrental.co.nz), owners can keep their properties in top shape and keep tenants longer.

The Essential Clauses You Need in a Tenancy Agreement

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A tenancy agreement is a legal document between the tenant or tenants and a landlord and/or property manager. Whether renting a property privately of through an agent, a tenancy agreement protects the rights of the tenants and the property owner. The aim is to protect the asset, the property from damage and neglect as well as the rights of the tenant and property owner.

Minimum requirements or clauses for a tenancy agreement in New Zealand would be:
1. property address
2. name(s) of tenant(s)
3. name of owner and property agent if applicable
4. term of tenancy
5. agreed rent amount

In addition to these essential requirements additional clauses are usually included as standard. Whether the agreement is handwritten or typed, one or five pages long it needs to cover the basic terms of the tenancy. Once signed by both parties the lease becomes a legal and binding contract.

Address
As well as stating the address of the property to be rented, an address for service is usually required. This could be the tenants parents as an alternative contact in an emergency or for receiving mail at the end of the tenancy for example. A contact address should also be provided for the property owner, this may be the estate agent or property manager on their behalf.

Names
All adult tenants are usually required to be named on a tenancy even married couples and adult dependents. As an agreed tenant each named person can be liable for the entire rent in the event of any arrears from other tenants in a shared arrangement or in the case of a relationship breakup. Children do not legally have to be named but are often included. At this step there may be a clause that limits the maximum number of tenants, children included. This can be to prevent sub-letting of the property and minimise wear and tear from multiple families or generations sharing one house for example.

Term
The term of the tenancy is important for both the tenant and the owner. Often agreements state a fixed term with 6 months being the minimum but 12 months is more common. Some rental agreements run from month-to-month unless terminated by the landlord or tenant. The term may depend on a number of factors like whether the house is for sale as well in which case a fixed term is unlikely so that the new owners could more easily give tenants notice upon their purchase.

Rent
The agreed dollar amount for rent should be clearly stated along with the frequency of payments. Rent is usually paid weekly in advance. The date of the first payment should be clearly stated so that calculations can easily be made at the end of the tenancy of any outstanding rent due or over payments made.

Within this clause details can be included of how payments are to be made e.g. direct bank transfer, cash/cheque at the rental office with direct bank transfer becoming more common. Here is where the lease may include any details about late payment fees and what to do if arrears happen.

Possible additional clauses may include references to pets (type and numbers of), deposits (refundable upon leaving property in same condition as start of tenancy), business activity restrictions, right to entry for inspections, access for repairs and maintenance including procedures for requesting work to be done and notifying the owner of any issues that cause damage if left untreated and any other clauses designed to protect the property from misuse. A condition report is usually attached to the tenancy agreement and will include a list of chattels as well as their condition such as curtains, blinds and any furniture or electrical items included.

Manage My Rentals are experienced property managers in Wellington. For information about us as Wellington property managers visit our website at www.managemyrental.co.nz. Our areas for property management include Upper Hutt so if looking to rent a property or rent out your own property then contact us today.

5 Mistakes to Avoid When Buying a Wellington Investment Property

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Buying an investment property in Wellington is a great way of generating regular income and accumulating wealth. However, it is easy for beginners in the real estate investment market to make costly mistakes. So you don’t fall into that category – take note of the following 5 common mistakes to avoid when buying an investment property in Wellington, New Zealand.

1. Adopting a short-sighted view

Wellington rental property management experts see this problem all too often. Many beginners rush into the real estate market wanting to make a quick buck overnight. There is a lot of money to be made by investing in Wellington rental property. However, it takes patience and persistence to build wealth through a robust real estate investment portfolio.

The best rental managers in Wellington place an emphasis on buying property that grows in value and appreciates with time. It is best to purchase below market value and plan for capital gains over time, rather than seeking an overnight killing.

2. Failing to seek expert financial advice

Financing a real estate investment is a complex matter which requires professional advice. There are many things to take into account including property taxes and mortgage rates. You can save a lot of time and money by letting experts set up the finance for you. The majority of property managers in Wellington advise their investors to seek financial advice to avoid setting up the wrong financial structure that may obliterate any gains or even leave you in debt.

3. Buying the wrong property

Many beginners buy the wrong property, especially when they neglect to do their due diligence. This can be avoided by being very thorough during the entire process. Firstly, have the home inspected to ensure there are no defects or pest infestations. Secondly, buy in the right location and target the right demographic. For example, buying a one bedroom home in an area that attracts families is a mistake. Understand the market and target your tenants accordingly, so you enjoy maximum returns from your Wellington rental property investment.

4. Forgetting to do your homework

It takes a lot of research to understand market trends and investment choices. Before buying any property, check out the neighbourhood, available amenities, crime rates, foreclosure rates and average rents. Would-be renters are interested in these factors when deciding where to live. Doing the same will guide you in choosing the ideal Wellington rental property that will have a high occupancy rate and consistent rental income.

5. Making an emotional buying decision

Buying an investment property is very different from buying a home you plan to spend your life in. The rental property must be selected from your tenants’ perspective. Many beginners buy property they fall in love with, instead of analysing its investment potential and its ability to generate rental income. Keep a level head and avoid making emotional decisions that will weaken your investment portfolio.

If you are a beginner in the property investment market, speak to an experienced Wellington property management firm. Manage My Rental NZ is well-respected for having expert rental managers in Wellington, who can help maximize your investment returns and minimise your tenancy risks.

Let the skilled Wellington property management experts save you time and money. Visit www.managemyrental.co.nz to begin or add to your investment property portfolio.

How to Leverage the Expertise of a Property Rental Manager

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The New Zealand rental property industry has grown exponentially over the past few decades. Now more than ever many individuals are opting to invest in real estate, especially in Wellington. Currently Wellington ranks third in the total number of rental properties after Auckland and Canterbury.

Rental properties are viable investments if properly managed. If you have the time, expertise and resources – then you may not require the services of a Wellington rental manager. If however you don’t have the time, skills or inclination then this is where rental managers in Wellington come into play.

What can Wellington property management services do for you?

Choosing the services of a Wellington property manager gives you expert assistance in effectively managing your rental property investment. These professionals will manage all day to day duties. Initially this includes finding appropriate tenants for your rental property.

You want tenants who will look after your property and meet their rental obligations on time. By enlisting the help of a reputable Wellington property management company, you can pass on the responsibility of finding and managing tenants.

Using property management services in Wellington will also help you keep hold of great tenants. Part of a property manager’s job is to be readily accessible to address and resolve any issues. A property manager will always be on hand to undertake any necessary repairs or maintenance tasks. This in turn ensures satisfied tenants who will be happy to rent your property for an extended time.

Property managers are responsible for ensuring that your rental property is kept in optimal condition despite tenant turnover. As mentioned earlier, these companies ensure that your tenants will always abide to the various clauses of your lease agreement and will conduct regular house inspections to determine if your tenants are taking care of the property as they should. This significantly upholds the condition of your rental property and takes away the stress of you having to conduct inspections yourself.

Manage My Rental is one of the leading property management companies in Wellington. The professional team are experienced and full of local knowledge which means you can be sure your rental property is in safe hands.

Keep your Wellington investment property profitable with Manage my Rental. For more information visit www.managemyrental.co.nz.

Five Things to Check Before Purchasing a Rental Property

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Property can be a great investment if you have the right knowledge about the potential risks and difficulties that can occur. If you don’t know what to expect, property investment can be a daunting and expensive experience. Before you find a property to buy in Wellington – have a chat with an experienced property manager.

Property managers can advise you on the ins and outs of investing in property so you are fully aware of the commitment, finance required and time needed to manage a rental property properly. Here are 5 basic pointers to consider before starting your search for an investment property:

1. Location
The amount of rent you receive and the quality of tenants you attract depends largely on the type of neighbourhood you are buying your rental property in. Consider places like Porirua or Lower Hutt. The demographic in these areas are comprised of families which would yield a longer term commitment than say a rental apartment in Wellington city which would attract students.

2. Cost
Property taxes differ throughout New Zealand so make sure you are fully aware of the amount of property tax that you will be paying on your investment. When setting the rental amount for your property, ensure the mortgage payments are covered. Depending which area in Wellington you are buying in, you may also have the potential for extra income above your expenses.

3. Safety and security
Make sure the neighbourhood is safe as it will be difficult to find tenants for a property in an area associated with crime. Carry out your research based on publicly found records rather than asking the owner who wants to sell their property to you. They may give you biased and possibly inaccurate information.

4. Local amenities
Properties that are located in areas which are close to schools, parks and public transport are generally more expensive to buy. However you can expect a good rental return compared to a property that isn’t near any amenities.

5. Possible developments
Check if there are any planned developments in the area you want to buy your rental property in – including council and private builds. These developments could affect your investment in a positive or negative way depending on what and where it is.

When you are looking for investment properties in the greater Wellington area, including Lower Hutt and Porirua, it is wise to enlist the services of a Wellington based property management company. Working with a local property manager is always a good idea because you can leverage their local Wellington knowledge and connections.

Wellington-based Manage My Rental is a trusted company which provides property management services throughout the greater Wellington region. The expert property managers can help you find an investment property within your budget. Visit www.managemyrental.co.nz to discuss your property investment options today.