Buying a property to rent out in New Zealand can be a good long-term investment. The first step to getting value for money is to purchase the right house. The second step is to engage a rental property management company to protect your investment.
Choosing tenants, organising inspections, routine maintenance and repairs can all be handled by a property manager for a small fee. This small fee is usually a percentage of the rental amount. Outsourcing this responsibility to a professional property manager means less stress for you and saves you money in the long term.
To get a property that will give you a good level of rental income and capital growth, you’ll need to understand what will appeal to tenants – which may be very different from what appeals to you. For example, your perfect home may be a character rural property with limited amenities, but there may be limited demand from tenants for properties like this.
Tenants seek easy access to their jobs and facilities. Begin your search for a great rental property by looking for areas and types of property that are in demand now.
Factors to consider when choosing a good rental property:
- Purchase price
- Mortgage repayments
- Rental income
- Job opportunities
- Insurance costs
Choosing the right neighbourhood is really important. Are there other rentals in the area? Are the homes in good condition? If an area has a large number of houses for sale it could be an indication of a problem with the area.
Ask yourself will your likely rental returns cover your mortgage, insurance (higher in areas prone to flooding for example) and other costs? An area with good local amenities and schools will attract long-term tenants, including families, especially if there is a low crime rate and good job opportunities.
Keeping your property tenanted is important to avoid loss of income during periods between tenants. The aim is to avoid high turnover of tenants by keeping the rent at the market rate.
Choosing a property that rents quickly can be a major advantage. Does your property have the following features?
- Close to transport links, shops and parks
- Modern kitchen and bathroom
- Plenty of storage
- Good use of natural light
- Off street parking or a garage
- Garden (important for tenants with children especially if fenced)
- Good security
Nine mistakes property investors commonly make when leasing a property without the support of a property manager:
- Becoming too friendly with tenants
- Failing to run their property like a business
- Neglecting to make regular property inspections (increasing the risk of damage developing)
- Failing to review and increase rent annually
- Putting family or friends in as their tenants who may take advantage
- Charging a low rental price and failing to keep the property consistently rented
- Inadvertently breaching the tenancy act due to lack of knowledge
- Forgetting to plan for preventative maintenance and ending up with costly emergency repairs
- Failing to put a formal tenancy agreement in place
To help you avoid these common mistakes engage the services of a local property management team who are proven rental managers in Wellington. Manage My Rental is a company that has a wealth of property management expertise throughout the Wellington region.
Contact www.managemyrental.co.nz to reduce your tenancy risks, maximise the return on your investment and save you time, money and effort.