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.