Are You Thinking of Buying an Investment Property?

Even if you are a seasoned property investor, but especially if you are relatively new to property investment, our advice is to “get advice”.

There’s much to consider:
  • Is it a good investment for me? Do the numbers work?
  • Do I know all I need to know about the property from a legal perspective?
  • What sort of rental return can I expect?
  • What improvements can I make to increase the value of the investment?
  • What type of features appeal to tenants; what are they looking for?
Here are a few tips that might help your decision making.

 

Bedrooms
The number of bedrooms is generally the first factor in determining how much a property will rent for. The bedrooms, the greater the rental income potential. Bedroom size is also important – they should all be big enough to accommodate a double or queen-sized bed.

 

Living Areas
The number of living rooms should be in proportion to the number of bedrooms. Usually, if there are four or more bedrooms, there should be more than one living area. Living areas are areas used for general living, ie – a space that can fit a couch, coffee table and TV. They also need to be far enough apart so that noise isn’t an issue. For instance, a house that has a combined lounge/dining upstairs and a rumpus room downstairs is considered to have two living areas.

 

Kitchens and Bathrooms
New or renovated kitchens and bathrooms are more appealing to tenants and “sell” rental properties. They also help maximise the sales price of properties when sold. Like bedrooms, the number of bathrooms can also influence the rental return.

 

Outdoor Living Area
Properties with an outdoor living area are easier to rent than those without any outside options.  Ideally, there should be enough space for a barbecue and seating for 4 to 8 people.  Yet anything is usually better than nothing.
Grounds should be low-maintenance and well maintained in the front and back. Consider the cost of lawn and garden maintenance and who you think should be responsible – you or your tenants.

 

Rental Property Investment

Presentation:
Properties that need repairs and maintenance aren’t appealing to tenants.  Property presentation is also a very important consideration.  As the property owner, home maintenance inside and outside is your responsibility, not your tenants.  It makes economic sense to ensure your property is presented in the best possible way.

At Quinovic Property Management over the past 30 years we’ve learned a lot about rental properties. We’ve helped residential property investors maximise the potential of their rental assets.

 Are you looking for independent, honest advice based on experience and knowledge?
Get in touch with Quinovic Property Management Parnell by clicking on the link below:

Residential Property Owners Need Protecting Too

How protected are you as an owner of a rental property?
The government has signalled we are about to see changes in residential tenancy legislation. This includes banning letting fees paid by tenants.  There is still very little legislative protection for owners of rental properties.
This lack of protection was evident recently.  The NZ Herald reported the company owned and run by Auckland property manager David Sharma, operating under Ray White Henderson, owed 67 landlords more than $350,000 in unpaid rents The number of landlords owed money by Sharma has since increased and is now confirmed as being 72 and growing.
 
The liquidators reported that most rental payments owed to rental property owners dated to January and February of this year.  There were no company assets available for immediate recovery.  The company’s bank accounts were overdrawn.  The chances of any of these property owners seeing their overdue rental monies anytime soon is pretty non-existent.
 
So how was this allowed to happen?  Aren’t there legislation and rules to prevent these sorts of things from occurring?
 
Unfortunately, the answer is ‘no’.  Up until 2008, property management was an activity for which a real estate licence was required and overseen by the Real Estate Institute.  Yet when the Real Estate Agents Act came into effect, a real estate licence was no longer required.   This very low barrier for entry meant a lot of new people entered the industry, cutting corners and service delivery.
 
Why aren’t the rental monies at least deposited into a trust account? Again, because it’s not mandatory for property managers to operate one.
 
It is a question every rental property owner should ask their property managers. It’s not only the smaller players who don’t run trust acounts for rental monies. Sharma is a good example of this. Although his business traded as Property Management Out West Ltd, it was under the branding of Ray White Henderson.
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At Quinovic Property Management, we view a trust account as imperative.  It protects our owners’ money and the integrity of our property management services.  All our rental monies come into a centralised trust account.  Then they get disbursed directly and automatically to our rental property owners.  This system means no rental monies are received or controlled by our individual branches.
 
At Quinovic Property Management Parnell, we ensure investment properties are professionally managed to the highest standard.  We can also give you peace of mind, knowing your rental income is protected.  We assist Auckland rental property owners put plans and strategies in place.
 
Have your Auckland rental property managed by Parnell’s property management experts.  Discover how much your rental property could be earning with a rental appraisal.  Follow the link below to complete our online form:

Tips for Renting Your Property

That Will Save You from Disaster

We’ve put together some tips when you’re renting your property to tenants.

Reference Check

Always ask prospective tenants for references and always call their referees.  If you rely on your own assessment of prospective tenants, this can lead to problems down the track.

Credit Check

Referees may be reluctant to make negative comments about a colleague or friend.  It is vital that you also carry out a credit check on prospective tenants.  Most debt collecting agencies can conduct credit checks.  You need to ensure you get the tenant’s permission first.

Tenant Check

To name a few, the following should be undertaken:

  • Background checks
  • Social media
  • Police
  • Credit
  • Verification of ID

A professional property management company will undertake these and more on your behalf.  Remember to get written permission from tenants first.

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Outline Expectations in the Tenancy Agreement

The tenancy agreement is the place to outline what you expect from your tenants.  It must clearly state if there are to be no pets, parties or smoking, the maximum number of occupants, and so on.  Failure to make specific conditions clear can lead to dispute.  If the matter goes to the Tenancy Tribunal, an unclear agreement puts you in a precarious position.  Neither party can sign away their rights under the Residential Tenancies Act.  Even if both parties agree to a clause at the time of signing a tenancy agreement, this clause may not be upheld if a dispute is taken to the Tenancy Tribunal.

Opt for a Fixed-Term Tenancy Over a Periodic Tenancy

You may find a good tenant who is going to pay the rent and look after your property.  If you sign them up for a periodic tenancy instead of a fixed term tenancy, they could give 21 days’ notice and leave.  This gives you very little time to find a new tenant, and it could cost you in lost rent.

A fixed term tenancy enables you to find new tenants before the current tenants move out.  This could potentially save you thousands of dollars.  It also enables you to protect against the property becoming vacant at a time of year when tenanting could be difficult, ie – November/December or mid-winter.

Take the Maximum Possible Bond

Many private landlords feel that no bond, or only two weeks bond is necessary.  It’s very easy for a property to be damaged, which could leave the owner out of pocket.  Tenants are given the right to live in an asset worth hundreds of thousands of dollars.  It is advisable to insist on taking the maximum bond possible of four weeks.

Lodge the Bond with the Department of Building and Housing

Always lodge the bond.  Not lodging the bond with the Department of Building and Housing is illegal.  If a tenant takes you to the Tenancy Tribunal, could be a fine for you of up to $1,000.  The actual amount is at the discretion of the adjudicator.  You could lose many hours dealing with the tenants and attending the hearing.

Talk to Kerry Kirwan about Quinovic Parnell managing your rental property:

Quinovic Property Management Parnell

How to Get Noticed when Applying for a Rental Property

In Auckland’s competitive rental property market – being turned down can be discouraging.  You could be competing against a number of other potential tenants for the same place.  Is it time for you to think outside the square?

You need to make a good impression on who is doing the viewing if you are to secure the rental property you want.  It could be a private landlord, a letting agent or a property manager that you will deal with.

There are many advantages to a property owner using a property management company.  So you could be dealing with a property manager from a property management company, rather than with the landlord.

The property manager does the reference, credit and background checks, and in due course provides the owner with their opinion.

Top Tenant Tips

At each viewing you attend, there may be a number of potential tenants there.  You should make yourself known to the agent by introducing yourself.  This is irrespective of how busy the viewing is.

Before the Viewing:

  • Make use of systems such as Viewing Tracker on Trade Me.
  • Familiarise yourself with the location of the property, and pre-plan which route you intend to take.  To ensure you arrive on time, take traffic into account.
  • Pay attention to what to wear at the open home and the first impression you will create.
  • If dealing with an agent – obtain a tenancy application form beforehand if possible.  You may be able to download one from the company’s website.
  • Fill out the application form before the viewing, and ensure you have a copy of your photo ID.
  • Put together a tenancy resume or similar, and include a photo.

The open home is usually the first time the property manager will have seen or dealt with any potential tenants.  It is vital you make a good first impression.

At the Open Home:

  • Be on time, and if you can turn up a little early.  If you are running a little late – it is courteous to let the property manager know.  Call or send a quick SMS if you are running behind time.
  • Introduce yourself to the property manager.  This is really important if there is a lot of interest in the property, or if it is in a sought after location.
  • Be sincere and honest, and communicate well.
  • If you could see yourself living at the property – let the property manager know you will put in an application.  Do what you say by following through.
  • If there is a viewing sheet at the property – fill it out.  You could be added to their office database and contacted about other available properties.  If unsuccessful for this property, you could be considered for another.
  • Resist the urge to openly criticise the property.  If it really doesn’t suit then you shouldn’t apply.  If the agent asks for your honest feedback – you should give your view without being overly critical.
  • If you pre-completed the application form – hand it to the property manager at the viewing together with a copy of your photo ID.  If you are from overseas you could use your passport as ID, and include a copy of your visa conditions.

After the Open Home:

  • If you emailed your application – follow up with the property manager by calling to confirm they received it.  Sometimes emails can go straight into junk mail, particularly those with attachments.  It is good practice to double check your tenancy application has been received.
  • Refrain from calling the property manager every few hours for an update. Property managers can be incredibly busy, and it can be very off-putting if a potential tenant is overzealous.

Get in touch with Quinovic Property Management Parnell

Auckland’s New Property Millionaires

The residential rental housing market is seldom dull.  What an eventful few weeks we have had!

Did you check the new Auckland property revaluations recently?  On the first day of online access 120,000 people checked 10.3 million Auckland Council property revaluations.

Auckland Council pre-empted a lot of increases.  They announced the average house price rose 46% to $1.076 million since the previous revaluation three years ago.

In June 2018 Auckland Council sets its new rate level.  It will be clear then how these increases translate into rent increases.  It is likely we will see upward pressure on residential rents.  Property owners and investors will attempt to maintain equilibrium in their rental returns.

Those new revaluations may already be out of date

Most property owners are aware the Auckland housing market has been cooling.  It also means it is likely some properties may be worth less than their new revaluation.

Real Estate Institute of New Zealand (REINZ) figures released for year ending October 2017 state the Auckland median property sales price fell 3.2% year-on-year to $850,000. This is the biggest fall since December 2010, and the lowest median price in the last 16 months.  Yet it might not be as grim as it first seems.

There has been a glut of apartment sales in what was the old Auckland City Council area. This brought down the median value for the whole Super City region.  And it depends on how you measure “price”.  REINZ also do another calculation using a House Price Index (HPI) formula.  For the Auckland City legacy area, this only resulted in a decrease of 0.8% year-on-year.  HPI looks at the mix and value of the properties sold, not sales price alone. This makes an allowance for all those apartments.  Feeling better?

Quinovic-Property-Management-Parnell-Propety-Investment

Hold Don’t Sell

The slowing down of Auckland residential property sales has seen a lot more properties which didn’t achieve an acceptable sales price, convert to rental properties.  Depending on property equity, many reluctant landlords with a well-managed rental were surprised at the achievable returns.

Quinovic Property Management Parnell offers free residential rental appraisals.  You might be surprised at what you can achieve.  Get in touch with Kerry Kirwan to discuss your circumstances by clicking on the link below:

Contact Kerry Kirwan at Quinovic Parnell for a Free Rental Appraisal

It’s not always smooth sailing being a residential property landlord.  In November 2017 the Dunedin District Court overturned a ruling known as the Vic Inglis Tenancy Tribunal decision.  The Tribunal ordered Vic Inglis, the rental property owner, to refund his former tenant over $10,000 in rent.  This was due to having non-compliant alterations in his rental property.  Common sense prevailed.  The District Court ruled that although the technical breach was “unlawful”, as the tenant had not suffered from the breach, she must pay back the sum she had received.

Where a rental property has no full Code of Compliance sign-off, Tenancy Tribunal adjudicators will be able to base their rulings on the degree of unlawfulness and harm caused to tenants.  This should help ensure that resolutions are fair to all parties.

We say landlords should ensure their rental property complies with all building regulations and not knowingly take risks.

On a Positive Note for Tenants

Housing Minister, Phil Twyford, announced Government plans to pass the Healthy Homes Guarantee Bill by Christmas.  Insulation requirements will be compulsory from 2019.  At Quinovic Parnell we have been talking to our rental property owners about insulation requirements for some time.

The Labour Government has indicated there will also be minimum standards for heating which is likely to be in the form of heat pumps.  Confirmation of insulation and heating requirements will be within six months of the Bill enacted.

Managing Your Residential Rental Property:

The clouds are forming.  Anyone involved with managing residential property needs to understand this.

Housing was a key issue in the recent election and we have a new coalition government.  Changes are definitely coming.  They have indicated that renting will be more stable and healthy for families.  So changes are most definitely coming!

Are you aware of recent past changes to your responsibilities as a landlord?  The big issue last year was smoke alarms and all home/apartments should be meeting the standards.  Make sure you know how this applies to your property.

Changes to the rules about insulation are compulsory from 1 July 2019.  Savvy landlords are looking to meet these standards sooner rather than later.  They know there are only a limited number of quality insulation installers available.

Some landlords have left things to the last moment.  It is likely costs will increase as installers struggle to finish all work by the deadline.

What should you be doing right now?  If you are a first-time landlord make sure you get a Landlord Pack from Tenancy Services.  Under the Residential Tenancies Act 1986 it will tell you:

  • What protections and responsibilities you currently have
  • Tell you how to lodge a bond
  • How to keep track of rental payments
  • How to go about selecting good tenants and what you can do if your tenant breaches tenancy law

Landlords and tenants must both respect “quiet enjoyment.  Are you aware of the responsibilities you have towards your property’s neighbours?  Do you let your tenants know about their responsibilities?

What about your responsibilities for locks, security, repairs and damage?  Experienced landlords would be wise to ensure their practices are up-to-date and robust.

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And then there’s the rental property insurance minefield.  Are you aware of how your insurance policies work and what they cover (and don’t cover).  This includes requirements for regular inspections, detailed property reports and relevant photos.

Moving forward, what can you expect?  Healthy homes are warm and dry.  You need to make sure your rental property is well-ventilated and has heating.  Our view is that over time a heat pump will be the least standard.

A Warrant of Fitness for rental properties will likely soon be essential.  It would cover ventilation, insulation and heating requirements.

Your future options.  The reality of being a landlord is you are running a business with its risks as well as rewards.  Being a landlord is no longer a hobby or part-time job.

At Quinovic Parnell it is our job to keep up with what is happening in all aspects of property management.  Our expertise allows us to help our owners plan ahead and maximise investment return.

Our knowledge and experience allows us to assist our rental property owners mitigate risk
With proven systems in place we check and report on all compliance areas affecting your property and tenants.

Talk to Quinovic Parnell about partnering with us.  We are your specialists in residential property management.  We commit to looking after you and your property with both care and return.

Get in touch with Kerry from Quinovic Parnell today about us managing your Auckland residential property:

Get in touch with Quinovic Property Management Parnell

Are You a Reluctant Landlord?

You marketed your home for sale, it didn’t sell at your price – now you want to move on

Auckland property sales appear to have slowed.  At Quinovic Parnell  we are seeing frustrated vendors turning to the rental market when their property hasn’t sold for the expected price.

Many of these property owners are frustrated and disappointed.  They have gone through the sales process, and the effort required – both physically and emotionally.  Often they have moved on in their minds from owning the property and are having to rethink what to do.  They may have already purchased another property, and visualise being there.

Can you fully embrace an entirely new way of thinking from home owner to property investor, and treat it like a business?  You could rent your home out until the Auckland property market supports a good sale.

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Perhaps you have decided to go ahead and become a landlord.  Our professional experience and expertise in residential rental property is critical to making sure you get things right.

Here are some of the things that anyone considering becoming a landlord needs to think about.  All good reasons to have experts who deal with these each day do the work for you:

  • Your legal obligations
  • Letting, tenant screening, acceptance, bond collection and lodgement
  • Professional distance when managing the relationship with tenants
  • Rent collection
  • Repairs and maintenance
  • Rental appraisal and rent increases
  • Regular inspections
  • Advertising and marketing
  • Record keeping

Do you have the time to deal with situations when they arise?  We do!  We have the time and the experience to do the important things that ensure the best care of your property, and the best return.

Get in touch with Kerry Kirwan today to discuss us managing your property:

  • P:  09 373 4353
  • M:  0220 108 005

NZ Herald Article re: Auckland Apartment Rents

An article yesterday in the New Zealand Herald by Anne Gibson suggests apartment rents in Auckland City will rise due to immigration and the growing economy driving up demand for rental accommodation.  At Quinovic Parnell in Auckland, we have seen apartment sale prices increase and rents stay much the same, however agree it is a matter of time before market rents start to catch up.

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Are you an Auckland property investor?  Get in touch about a consultation so you can explore how we can add value to your Auckland property portfolio.

Get in touch with Quinovic Parnell today:

Contact Quinovic Parnell in Auckland

Talk to Mary or David Vinsen, or speak with our Business Development Manager on 0220 108 005

Landlord Rescue

I was reading an interesting article recently on residential property management in Florida and it occurred to me that we could offer an amazing service that was discussed. Landlord rescue. How many landlords are there in Auckland who are tearing their hair out because of unpaid rents, damage to rental properties, fear of increasing rents in case tenants leave, not sure whether to inspect properties regularly, worried about legal aspects of property management, afraid of vacancies, arrears,not sure who to get advice from or just plain tired of managing property and staying awake at night because of it, tired or ill! Just plain sick of managing rental properties!

If you know a landlord who needs rescuing we can help them. Let us know and we will take the problems into our capable hands for them.

Mary Vinsen & David Vinsen Quinovic specialist property management Parnell.

Contact us