Property Management

The Auckland rental market has continued to experience strong demand and average weekly rent increases across the board during 2011, although some areas were more subdued with stiff competition for quality tenants.

Allen Realty continues to achieve low vacancy rates and we expect this to continue as the market picks up in the New Year. Although we have experienced a small drop in new tenant queries in the last couple of weeks of November, this is in line with the usual drop in demand over the Xmas and New Year period as tenants are preoccupied with family and holiday activities.

Department of Building and Housing (DBH) statistics show that the average weekly rent for new private tenancies in New Zealand during September 2011 was $328. Click here to view the entire rental market update and DBH statistics.

Once you have completed a thorough marketing campaign for your rental property and selected a suitable tenant, you will need to negotiate the terms of the tenancy. In order to facilitate this process, the important terms should be discussed by phone at the time of offering the tenant the property.

1. Tenancy start date. You should negotiate a start date that is suitable to both yourself and the tenant. It is common to meet in the middle if there is a period in between when the prospective tenant can move in and the availability date of the property.
2. Weekly rent and bond. The rent and bond amount as well as frequency of payment needs to be discussed with the tenant. Rent should be paid in advance and weekly payments are the norm, but payments can be made fortnightly or monthly if agreed.
3. Term of the tenancy. There are usually two types of tenancies. A Periodic Tenancy has a start date and no end date and continues until either the tenant or landlord gives the required notice to terminate. A tenant can give 21 days’ notice to vacate at any stage during the tenancy, and a landlord can give 42 days’ notice if they plan to sell or are moving in, or 90 days’ notice in any other situation. (For further information on terminating periodic tenancies see Section 51 of the Residential Tenancies Act). A Fixed Term Tenancy has a start date and an end date and cannot be terminated by giving notice. Usually fixed term tenancies are for 6 or 12 month periods. You can apply to the Tenancy Tribunal to terminate the tenancy during the term if either party breaches the terms of the agreement.
4. Chattels to be included. These are items of furniture or appliances etc that are to be included in the rental such as fridge, heating, stove or dishwasher. Any chattels that don’t work or are not included should be discussed and recorded at the start of the tenancy.
5. Other important terms to consider include:

• The maximum number of residents permitted
• Responsibility of lawn and garden maintenance
• Pets or no pets allowed
• Any  other specific terms should be discussed before finalising the tenancy agreement

Once the above terms have been agreed a written tenancy agreement can be completed. This is required by law to record the terms of the tenancy. (The Department of Building and Housing provides a basic tenancy agreement on their site). Once the tenancy agreement is completed, a deposit should be receipted and this is usually one week’s rent. Copies of the agreement should then be issued to all parties. Prior to the tenants moving in a property inspection should take place and a copy of this report given to all parties.

Property management is about people and the tenant selection and negotiation of terms process is all about customer service. Tenancy applications can fall over at the last minute as tenants can change their mind, however a landlord will have a lot more success in gaining a long term tenant if they offer a professional service and have effective communication skills.

All landlords face the prospect of choosing suitable tenants for their rental property at some time or another, and there are important steps involved in this process in order to reduce potential rent arrears and damage to the property.

1. RUN an effective marketing programme. Market the property at a reasonable market rent reflecting demand in the local area and ensure the property is well presented in order to attract as many quality tenants as possible—higher demand will potentially command higher rents. If your property appeals to a wide variety of people you are more likely to receive a greater number of enquiries.
2. PROVIDE a detailed tenant application form. This should include personal contact details, forms of identification, work and rental history, start date required and permission to undertake credit and reference checks.
3. OBTAIN a copy of photo identification (drivers licence or passport is ideal) so there is no disputing identity.
4. VERIFY accommodation, employment and character references. Phone or email all verbal or written references to ensure their authenticity. Also verify the regularity of previous rent payments—a copy of a previous rent ledger will enable you to do this.
5. COMPLETE credit checks. These can be processed by an authorised credit agency—charges will apply. You can also search for any previous Tenancy Tribunal Orders online free of charge. This will tell you if the tenant has ever owed a landlord money from an earlier tenancy.

In a competitive market a tenant may apply for more than one property at a time, so the above steps should be completed quickly so you won’t lose a quality tenant to another property.

Once this process has been followed you will be able to make an informed choice and select the tenant most suited to the property. For further valuable advice on finding tenants go to Attracting & Maintaining Tenants.

Choosing great tenants is a specialised skill, and using a professional property management company means you get their marketing experience along with the added advantage of drawing on their existing tenant database.

Household Insulation

The average NZ home will use around 35% of their total energy bill to heat their home. If there is poor insulation this can mean a lot heat will be wasted.

Nearly 60% of NZ households do in fact have poor ceiling & under floor insulation (Taken from a NZ 2005 House Condition Survey) and homes built before 1978 did not have a need to be insulated, so if you are currently addressing a moisture problem it is a worth-while idea (at the very least) to invest in ceiling and under floor insulation.

Moisture in the home is a direct cause of mould, mildew and dust mites which can be harmful towards allergy and asthma sufferers. Property owners and tenants alike want warm dry value-for-money homes.

In most cases a landlord’s goal is to secure a long-term tenancy. Anything that can be done to improve, encourage a tenant to stay long-term, can be a sound investment.

It’s true that wonderfully presented gardens may perk up the appearance/presentation of your property; however some potential tenants may be turned away from the thought of having to deal with the maintenance when deciding whether to rent your property.

For those who already have beautiful gardens in their rental properties that are expected to be maintained to a high standard, you should think about providing your tenants ‘added value’ by contracting a gardener to manage them and adding this cost in to the rent.

As a professional property management company we frequently take over troublesome properties from Auckland landlords, with current tenants, managing  tenancies independently.

Numerous tenancies such as these have encountered issues for quite some time as a direct result of property owners either too busy or simply not having the experience or urgency, tenants have been allowed to continue renting.

When your property is ready for its final touches then installing window coverings will often be the final task prior to marketing for new tenants.

Window coverings complete a property and not only help make the property look modern but they also help give prospective tenants the perception of privacy, security and warmth. Let’s face it ? property is a people business and perception is the key. You have done all the hard work in presenting the rest of your property, so some thought needs to go into window coverings. This article is aimed at assisting you to make the right choices.

There is much anticipation and debate for many Auckland property owners about renting out furnished properties during the Rugby World Cup 2011. Many landlords have stories about early rental enquiries for the event and the possibility of securing great rents. This article aims to identify some pros and cons of renting your properties during this event.