Don't Subsidize Someone Elses Lifestyle.

I couldn't have put this better myself!

I believe that many businesses are going to be recruiting and competition in certain roles and sectors is going to be evident resulting in wage inflation. With living costs going up and inflation increasing (particularly with insurance premiums rising, rates increasing and commodity prices increasing) wage inflation is a must. Our tenants have more money to pay the rent, and the NZPIF survey earlier this year showed that tenants expect their rents to go up. So lets not disappoint them, and remember to continually monitor and increase your rents. Yes you may have a good tenant, but I can assure you that there are many tens if not hundreds of thousands of good tenants in the large city of Auckland. You owe it to yourself not to subsidize your tenant's lifestyle - charge market rent and remember small increases often. If you are too scared or shy about putting your rents up, or don't know what market rent is, you really should consider having a property manager as chances are they will be paying for themselves anyway!
David Whitburn, President, Auckland Property Investors' Association.

Your name is your most valuable trademark.

We come across plenty of young people who rent properties. They have no idea of the repercussions of not paying your rent, damaging the property or just not notifying the landlord about critical maintenance issues.

If they have to go to the Tenancy Tribunal this will be on their record – with all other potential Landlords being able to see the outcome of the hearing. This could make it difficult to rent in the future. It may not worry a 20 something who jumps from flat to flat, but I am sure a 30 something with young children and a desperate need to find a decent home may regret having a record.

If they owe money after the Tribunal hearing then this may also affect their credit rating. Which in turn could affect their ability to do a who number of things such as gaining credit, buying a house or even limit your job prospects.

One young “ex” tenant that have been dealing with told me it didn’t worry him if I got debt collectors to collect the amount he owed in rent arrears. After all he owned nothing and had nothing for them to take, he was bullet proof and invincible. I sent him a little email, outlining the impact that decision will have on his future. He is due to make his first payment tomorrow towards paying back his debt.

So for all tenants who are new to the renting scene. Don’t take your decisions lightly. Take care in who you choose for flatmates. Always pay your rent and look after the place. Your name is your most important trademark and don’t ever tarnish it.

7 Sins of Renovating

7 Deadly Sins of Renovating

In the latest release of the Property Investor Magazine there was an interesting article about renovating. Seeing it was summer and a common time for landlords to undergo maintenance and renovations I thought I would remind you of a few ‘what not to do’s’.

When it comes to renovating, you have to know who you are renovating for i.e. your target market. Decide if you are renovating for a small young family, young professionals or an elderly couple and then renovate by catering to their needs i.e. having carpet colours that will hide stains for families with young children, fully fenced properties and making sure all windows have safety latches. These things appeal more to younger families and will increase the pulling power in making their final decision to want to live in the property.

Copying other peoples renovations never ever work! How often have you heard of cases where people see things on TV and say wow we should get it like that! Stop right there, as the property you are renovating is firstly an investment and secondly is different to the one you saw on TV.

Not doing your due diligence and having a lack of planning will lead to the renovations taking longer and more often than not, making hasty decisions lead to spending more unnecessary money! Plan well, set you budget, monitor the progress and end up with a successful renovation.

Wondering what you budget will be? Think about things such as the value of your investment, what your renovations will be to suit the specific target market, figuring out whether you are over or under capitalising. Rule of thumb never proceed without knowing what your budget is!

Don’t have a experience with renovations? One of the biggest mistakes people make are they do not know what things such as materials, labour administration cost. Make sure you have at least two or three quotes and make sure they are for the same thing and then make a decision accordingly. There is no point in comparing apples with pears.

The final two sins are taking too long to decide and not getting expert help thinking you have it under control. We as investors undergo renovations to improve the quality of living for our tenants and by taking to long it can be a nuisance for not only the tenants but also suppliers and tradesmen who are ready to go and putting of other jobs to get your one done. In saying all this there is a fine line between being to hasty and then taking to long. And finally getting an expert opinion and/assistance never is a waste of money particularly if you have no experience with renovations. So seek advice if needed it will save you more money in the future compared with the small cost to get advice now.

5 Steps to Finding the BEST Property Manager. Step 5: What background checks do they do?

Do they take the first cab off the rank or do they do rigorous checks? A bad tenant can cost a lot of money. Thanks to the internet there is a lot of information floating around out there. If someone has a history of being a bad tenant then there is no reason why your property manager shouldn't know about it. They should be checking references and qualifying the references as legit. They should be gathering as much information about the prospective tenant before they give the green light.

I have heard of companies who don't check references as they say people can lie. A good property manager will know what questions to ask references; the right questions will uncover false references. Reference checking is crucial as it builds up a profile of a person they may have only spent 30 minutes with when meeting them at the property. You want to be sure they are careful choosing someone that is going to be living in your asset.

5 Steps to Finding the BEST Property Manager. Step 4: Make sure you click.

Realistically not everyone in the world is going to get along with everyone else. You need to find someone who has the same goals as you otherwise both sides of the party will just get frustrated. You have to have a good relationship with them, you have to trust them. Make sure you are very clear what you want and make sure you are very clear on what they expect from you – it should be a team approach.

Your ideal property manager should allow you to relax. They are there to do the hard work for you. They have an intimate knowledge on the Tenancy Act and how tenants think. Ask some curly questions and see if they have the right answers.

5 Steps to Finding the BEST Property Manager. Step 3: Ask all the right questions

Feel free to be nosey, after all these are the people who you are entrusting with one of your biggest assets. Are they landlords themselves? What associations do they belong to? Why are they property managers? What are their policies and procedures? Do they have a code of ethics? What is their philosophy on property investment, is it "just a rental" or is it “an asset”?


If you Property manager is also a Property Investor they probably have a
greater understanding of the ups and downs of having tenants. They will know
that very few property investors are cashed up millionaires jetsetting
around the world following the seasons. They will realise that typically if
the rent goes unpaid, the money has to come from your wallet to pay the
mortgage, and you will notice it. Therefore they will try to limit times
between tenants, they will get maintenance done when it occurs to avoid
costly repair jobs down the track. They will pick tradesmen that are value
for money. And this doesn't mean the cheapest, it means the guys who do the
best quality work but don't charge an arm and a leg. They will chase up rent
arrears and make tenants accountable for their actions.

5 Steps to Finding the BEST Property Manager. Step 2: What’s your first impression?

Give the company a call. How friendly are the staff, how well do they answer your queries? Do they put you at ease or make you feel uneasy? If you leave a message how long does it take for them to get back to you? Think about how they will make the tenants of your property feel. If they are easy to talk to and prompt at calling back, tenants are more likely to apply for the property.

When doing landlord reference checks for our prospective tenants we have often had a hard time getting hold of existing landlords, understandably people aren't going to be available all the time but a good property manager will have an answer phone at least! If you are having trouble getting hold of them then how will prospective tenants organise a viewing time, how will a tenant get hold of them in an emergency?

5 Steps to Finding the BEST Property Manager. Step 1: Look at how they advertise.

Scan the trademe ads, which company does the best advertising? Which company has the longest times between listing and letting?

We see plenty of ads where there is just one poor quality photo that doesn't show much , where the blurb about the property just states the basics. Not surprisingly these tend to be the properties that were listed months ago and are still available.

Find a company that takes advantage of the internet's capabilities. Do they use good quality photos that show the place in its best light? Is the blurb evocative, does it sing the praises of the property? Do they have a virtual walk through? Do they use cryptic abbreviations or language everyone can understand?

What ads do you think are the most effective? What ads have you wanting to have a further look at the property? It will be the ones which show the property in its best light.

"Here's the key, help yourself!"

When your property is vacant, how does your property manager show it to prospective tenants? Some give keys to tenants and invite them to show themselves through. It isn't as uncommon as you would think - a very large real-estate company's rental division does this. It makes me shudder. While the tenants do fill out an application form beforehand, their references are not checked and any ID is not confirmed as genuine. People lie on their paperwork, even if they do want the property and not any other foul intent.

The risks to your property are numerous. Keys could be copied, and the property burgled once new tenants move in. They could take the copper pipes and hot water cylinder. Often when the cylinder is stolen, theives don't bother to turn off the water, so the house gets flooded too. That's a whole lot of trouble and expense for you because of a lazy property manager.

The property could also be trashed. Rubbish & grafitti are real risks, potentially expensive and heartbreaking to sort out, and it will put off those prospective good tenants.

They could leave your property unsecure. It is common for people to open doors and windows when looking at a property. If you don't go around behind them and secure them, you leave the house open for others to steal or ruin. What would your insurance say?

They might not give back the keys. I showed a man through a property we manage, and two days later, he rang to tell me he had the key, and where should he return it to? It was a key from another company for another property, and he had forgotten which one. Frankly, that man gave me the creeps when I met him at the property. I wouldn't have rented him a property.

Best practice is to have a property manager accompany the tenants through the property. Not only can they keep an eye on your belongings, they can be assessing from their behaviour whether they will be careful and respectful of your property. I had a prospective tenant look at a house and I couldn't get out the door quickly enough; her kids were so destructive in the few minutes she was there. I can't imagine what it would have been like if I hadn't been. Needless to say, she didn't get the property. She might have if I hadn't met her there. Horrors.

Viewing the property with a property manager gives time to build rapport, and interview the prospective tenants, checking the information they give. It also gives opportunity to tell the prospective tenant about the features of the property they may not have noticed, like insulation.

Ask your property manager if they show tenants through, or just give them the keys to help themselves.

The Child/Parent Relationship.

The tenant /landlord relationship is very much like a parent and child. You will have tenants who will always try to push the limits and take advantage of a weak landlord at any chance they can get. We see landlords who don’t chase up rent arrears, because the tenant gets angry and calls them mean. We see landlords who defer maintenance, because the tenant won’t let tradesmen into the house unless it’s on their terms and a time that suits them. We see tenants who try to break fixed term leases and try to justify their demands.

If these tenants were children what would Super Nanny recommend? She would say you need to stand your ground and you have to back up your demands and NEVER back down. If they persist stick them in the naughty corner (go to the Tenancy Tribunal).

I was recently talking to the building manager of a complex we manage apartments in. I had mentioned that on my last visit both entry doors to the “secure” complex were wedged open and the place was looking a bit messy. His response was “what can you do?” My response was “if you find them wedged open you shut them, and you send a letter to tenants telling them to do the same. You try to find out who is responsible for the mess and give them warning” It’s pretty easy to find the culprit when the mess is directly outside an apartment. Like Super Nanny says it may take time and it will be a battle of wills, but unlike training a child, if the tenants persist with being stubborn you don’t renew the lease. If it’s a bad breach, take them to the Tenancy Tribunal.

Click here to get Rental Results Property Management

400 years to do it yourself?

There are so many things we can do ourselves, but instead pay others to do. For example, I can make a good spaghetti sauce, but getting one in a jar is often easier, and sometimes I admit, superior. I can cut hair, but I know I look much better if a hairdresser does it. My old school photos taught me a bowl on the head does not a good fringe make. I grow vegies at home for fun, but I wouldn't be without my organic greengrocer to provide what I cannot. They're also great insurance against slugs and hail.

And so it is with property management. Kiwis think 'I could do that myself' and many probably could. Especially if they dedicate some time to learning how. There are a few good books on the topic, and Department of Building and Housing's website is a useful resource. However, just like my haircutting attempt, it is better in the hands of someone who spends a great deal of time and effort on it, who has experience under their belt handling the many issues which arise.

According to Malcolm Gladwell, best selling author, an expert is someone who has spent 10,000 hours learning their craft. That's 5 years full time work. If you are going to do this properly, have you five years to do so? Do you have enough properties to give you the experience you need? That would be more than 80 properties to make a full time role. If you have only one property, then you would need to spend 400 years to get the same level of experience. Not likely, huh.

When you are ready for property management that is better than the ol' bowl on the head, talk to experts, ones with more than 10,000 hours of experience.

Click here to get Rental Results Property Management

Time to Set the Terms.

Wellington has a distinct peak letting season, and that is late summer, around the end of January to late February. This is the time all landlords should be getting the optimum rent for their property and having a choice of tenants. Its the time landlords call the shots with lease terms and conditions, because, well, to put it crudely, it tenants don't agree, there will be another one along in a minute who will.

Why then do some landlords agree to 6 month leases at this time? Madness! This sets them up to trying to rent their property in winter, when it is dark, cold, and wet. It has to be an exceptional property to get a lot of attention then. There is no rule that says leases must be either 6 months or 12 months. There is no rule that says you need to agree to longer terms (eg years) without lease renewals.

At peak letting time, you call the shots. Set the length of lease to end at the next peak letting season, no longer or shorter. Don't discount the rent for 'long term' or 'good tenants' - you're missing out on profits. Do include a rent review clause. Don't agree to pets unless they have glowing references and never inside smokers. If you are tempted to do so, reach for the phone and call us immediately to save your sanity.

Click here to get Rental Results Property Management

Free-loading Fixed Terms?

Many landlords fear fixed term tenancies. They think they mean they won't be able to kick out a non-performing tenant, and they will be stuck with free-loaders until the lease expires, whenever that will be. Couldn't be more wrong. No matter what the lease agreement, both parties must do what they are obliged to, or the lease could be ended by Tenancy Tribunal.

If tenants don't pay the rent, you apply to Tenancy Tribunal and get them kicked out. Likewise any other breach, like keeping pets or extra people in the house. Many landlords just give such tenants 90 day notices (under periodic tenancies) and suffer for months until they finally leave. They are obviously concerned how a fixed-term lease will affect that. It's easy. Learn how and when to use Tribunal, and do so. Too nervous to do that? Get us to do so - we get great results.

When the Bulb Goes Out.

Light bulbs. Ah, what a treasure. Only noticed when they are not working, these tireless soldiers of the light do their duty to guide our path and protect us from the perils of eye strain. And like most soldiers, some will fail in their duty and die.

All lights should be working at the start of a tenancy. There is a couple of tricks for keeping these little soldiers going as long as possible.

First: Check the bulb isn't too hot for the holder. Often shades will have "Max 60w" or similar printed on them. Go over this wattage, and melt the shade. Expensive and dangerous, so don't do it. As a general rule, the smaller the fitting around the bulb, the cooler the bulb must be. (If you don't already know, generally, the more watts equals more heat being released. LED bulbs are cooler than compact fluorescent bulbs, which are cooler than incandescent, which are cooler than halogen).

Second: Make the light appropriate for the task. A 45 watt bulb will be fine over the toilet, but not in the middle of a large lounge. A chandelier will likely need lower wattage as the number of lights compensate for watts.

Third: Recessed fittings need special reflector bulbs. These are more expensive, but will last longer. They don't look glamorous at all when most of the bulbs are out.

Fourth: Halogen bulbs need special care. Do not touch them with your skin. The oil from your fingers will cause hot spots, and these special soldiers fall faster with heat. If you have a choice of halogen or regular bulbs in a light fitting, go with regular. Halogens are not great in rentals - the bulbs cost a lot and last no time at all, annoying your tenants.

Fifth: Pay for quality. I've seen 89c bulbs come apart, leaving the metal base in the light socket, and the glass bulb smashed to pieces on the floor. It's hazardous work to get the metal bit out of the socket, never mind the broken glass underfoot. Go with a reputable brand and save electrician's call outs.

Click here to get Rental Results Property Management

Super Speedy Repairs and Maintenance

One of my favourite things about property management is how quickly we can get work done other people have to wait for. Yes, that's right. We don't have to wait for a plumber or electrician, we call, and almost before we hang up the phone, the job's done.

Why is this the case? There are a number of reasons, and some are simple for you to do too.

1. We make it easy for them to access the property. We have a clear protocol of how they are to contact the tenants to make it simple and easy for the trades person, and what to do if the tenant can't meet them. There is no mucking around waiting until some vague future date where the stars align and it might be convenient for them, the landlord, and the tenant.

2. We give them a lot of work. Only a fool would bite the hand that feeds them, and we feed the good ones a lot. Not an option for the average property investor. If you are wondering why you are waiting on a tradie, odds are they're working on one of our properties. Sorry.

3. We don't waste their time with pointless quoting. If the job needs doing, it gets done. Why waste a trades persons precious time getting them to submit quotes to save $5 on a $300 job? If you have tradespeople you trust, and you show them respect, you will save yourself money by the speed and efficiency with which they work.

4. We don't second guess them. Don't get me wrong, if I know more than the tradie, they don't do the job. Hire people who are skilled at what they do and are empowered to give you the best solution. Micromanage them at your peril - that's how jobs go very very bad. Stick to what you know best and let them do what they do best.

5. We pay tradies promptly. The longest any trades person has to wait for payment is a fortnight for us - it's our company policy. Our average is just 3 days. Others take more than 25 days to pay. That's a long time for tradies to cover their wages and materials. If you were a trades person, would you rather work for someone who will pay you this week, or next month?

So, no surprise we get the best tradespeople in record time to sort out problems at your property. Because we choose the best, we are sometimes surprised with the solutions they come up with - often better and more cost effective than we could have requested. Perfect.

Going overseas on a holiday?

Have rental properties and thinking of going out of the country for more than 21days? Think again!

With recent amendments to the Residential Tenancies Act 1986, Section (16A) states that ‘Landlord must have an agent if out of New Zealand for longer than 21 consecutive days’.

So thinking of taking that nice trip to the Mediterranean for 6 weeks or going on a picturesque one month cruise in the Fjords in Norway and hoping that by managing your rental properties through email while you’re away will be fine? Think again! With recent changes to the act you have to now legally appoint an agent in New Zealand to manage your property while you are away. So what is an agent? An agent is someone who the owner appoints to manage the property; it can be either a property manager or family and friends.

The risk with using family and friends would be for example if something went wrong, would they have the right contacts and know about on how to handle the situation and fix it? If the tenants were not paying rent would they know their legalities in how to deal with rent arrears? With inspections do they know that they can’t just walk inside the property without prior consent from the tenants as this could be a 3 month jail sentence?

We have recently taken on board a property where the owners are going overseas for much longer than 21 days and were going to just manage the property via email to keep in touch with their tenants and arrange any maintenance required. They were quite shocked to realise they had to legally appoint an agent in New Zealand while they were away. They quickly signed the management authority and placed the property in our hands. This is just one of the many new amendments made to the Residential Tenancies Act some private landlords are not aware of. I recommend all landlords update their knowledge on the recent changes to the Act so they know they are doing everything right in managing their properties.

Appointing a property manager takes all the hassle out of your property and keeps you stress free and gives peace of mind whilst you're overseas. So know of anyone going overseas who have rental properties? Direct them to us and we can deal with the rest!

Where to Dispose of Household Goods

Occasionally, you'll have a property full of furniture and house hold items, only problem being, you don't want it. I'm going to assume that you have the right to dispose of it (ie it doesn't belong to a tenant or is a hire purchase). Here are some options for disposing of goods so they can do a bit more good in the world before they are junked:
1. Call an antique dealer or second hand trader. They may take the lot, or pick and choose. They (hopefully) will pay you. Expect to get relatively less for a house-lot than for individual items of value.
2. Auction items on Trademe. Try a $1 reserve and watch them go. You might want to make it buyer pick-up to save you a lot of running around. Great if you have a camera, internet connection, and a bit of time to set it up and let the auctions run.
3. Charity stores like Salvation Army may be interested. Be aware, they are rather fussy these days and will not take junk. They will pick up if you have a number of items, they won't pay for them.
4. New Migrant and Refugee Services may want furniture and household goods. They will pick up, and they won't pay for items.
5. Recycling centres at landfills may take all kinds of things. Some pick up, and you won't get paid.
6. Give away to friends, family, and starving students. They may or may not pay you for it.
7. Talk to specific collectors of any special items eg film buffs for old movie equipment and reels.
8. Archives or Museums for any items of historical interests. You may be surprised what is interesting to people, like old letters and clothes. Before you biff, ask if they want to look at it.
9. Schools, hospitals, pre-schools, and anywhere with a waiting room may appreciate books and magazines, and toys. You will likely have to drop them off.
10. Have a garage sale. You may make some money off this. Do put up signage about a week beforehand, and maybe put an ad in the paper.
11. Food can go to foodbanks. You might need to drop off, or use bins at supermarkets.
12. Blankets and bedding, and newspaper can go to SPCA. You may need to drop off or use bins at recycling centres.
13. Old carpets and rugs may please a gardener - they make good mulch and weed mat. They might pick up.
14. Metal recyclers or waste exchanges will take electronic goods (like Earthlink). You might get paid for them if the metal content is sufficiently valuable.
15. Take what ever is left over to the tip. There are fees for this, and more for items like car tyres. Hopefully this is your last option and is only for a very small pile of what ever cannot be re-homed elsewhere.

5 tips for Tenancy Tribunal success

Tribunal.  The very word strikes fear into most landlords and they'll do anything they can to avoid it.  They resign themselves to losing hundreds or thousands of dollars and put it down to ‘learning.‘  It doesn’t need to be that way.  Savvy landlords know that with a little bit of effort, lost rent, costs for cleaning, damages and the like can be recovered (albeit slowly in some cases) if you face your fears and go to Tribunal.  

Here are out 5 tips for Tenancy Tribunal success:

1. Call DBH Tenancy Services (0800 83 62 62).  Talk through your situation with them in an unbiased and factual manner so you get the right advice.  You don’t want to become unstuck when the adjudicator cuts through the bull and combines the facts with the law.
2. If you are applying for repayment of rent arrears, ALWAYS tick the box that says you are seeking to end the Tenancy.  This sends the message that you are serious and gives any consequential clauses some teeth.
3. Preparation, preparation, preparation.  Get to know the Residential Tenancies Act 1984 (and amendments).  It’s a big document, so depending on what you are claiming for at least brush up on the relevant sections.  Get all your paperwork together and try to predict what the tenant will counter argue.
4. Take three copies of everything that you are submitting as evidence – one for the court, one for the tenant and one for yourself.
5. If you have been successful and the Tribunal has awarded you money, strike while the iron is hot.  Talk to the tenant at the hearing and arrange payment.  If they are unable to pay the whole amount immediately, set out a payment plan and give them a deposit slip to pay the money into your account.

Of course, the best way to avoid all of this is through rigorous tenant selection and management.  As the old saying goes, ‘an ounce of prevention is worth a pound of cure’ and although sometimes things still go wrong you stand a better chance of a smooth tenancy if the tenants have had their references, tribunal history and credit checked out. 

Contact us and take advantage of our Tenant Selection Guarantee.

No doubt Tenancy Tribunal can be a daunting prospect if you have never been to it, but as landlords we need to set the example and send the message to tenants that they can’t get away with murder.  Especially if it ruins your carpet.

Does your property manager know to ask you?

This week I’ve had a potential client who was saved from paying way too much for an illegal house conversion. They were considering buying a house which had been converted into two flats, and wanted us to come do a rental appraisal to check the rental figure quoted was indeed 'on the money'. My first question was "does the council know it is two flats?". "I don't know," said the potential investor, "where can I find out?". A quick trip to the council buildings had them armed with what they needed to know. Unfortunately, the council did know about it, and they were not happy at all. If the investor bought it, they would need to bring it up to spec, and it wouldn't be cheap to do so.

They could have still tried to buy the property at a fair price and do the work needed, but as ‘low maintenance’ was one of their selection criteria, they walked away. I’m glad they knew themselves well enough to do that. We could have handled a project like that for them, we have before, but they knew this would not be their best introduction to investment property.

I wonder if the person who does buy that house/those flats knows what they are getting themselves in for. Under the changes to the Residential Tenancies Act (RTA) in force from 1 October 2010, the property needs to 'comply with all requirements in respect of buildings, health, and safety under any enactment so far as they apply to the premises'. Without fire-proofing between the flats, it can't be rented as two separate dwellings. The owner could be fined exemplary damages of up to $3000 under the RTA. If the worst case scenario happened, the RTA would be the least of their worries, make no mistake.

A Beautiful Tenancy Agreement

One of the essential first steps of a tenancy is to sign a tenancy agreement with your tenants to make it clear what is expected of them to have a successful outcome for both of you. Most landlords don't put in enough clauses in their tenancy agreement to spell out what is required of the tenants (the DBH standard contract assumes everyone has a working knowledge of the Residential Tenancies Act, but I bet most landlords have never read it, let alone their tenants). Also, many put in clauses that will not be enforceable should the tenancy end up in Tribunal (a classic is 'tenants will commercially clean carpet upon vacating'. This can't be enforced as it isn't 'reasonable' to expect that, so is pointless to have it unless you add the magic words 'if required').

Our tenancy agreements have 34 standard clauses, plus we add more in for special circumstances, such as the tenant having a pet (that takes 3 extra clauses!), if they need a guarantor, or can't pay all the bond or rent on the day they sign the contract. We also discuss all of these clauses with the tenants, we don't just thrust the contract at them and say 'sign here'. As a result of our process we have great success in tenants taking care of the property and leaving it in good order.

If your tenants can't seem to look after the property, it could be your contract is lacking the right clauses to make your (legally compliant) expectations clear. We can help you.

The first rule to avoid "bad tenants" - you can never do too many checks.

Further to Jackie's last blog, I came across another situation recently where the property investor could have been saved time and expense if their Property Manager had spent a few minutes checking the prospective tenants thoroughly. While doing a routine check for a prospective tenant on the Tenancy Tribunal site I noticed an individual had a history of seven Tenancy Tribunal applications made against them over a period of 3 years with total costs awarded being over $7000.00 plus other costs that were not pursued at Tribunal. All the applications were made by Real Estate companies and each of the offences were similar to the last.

You can forgive the first applicant and maybe the second as the first case might not have been published at the time of checking the tenants background, but there is really no excuse for the real estate companies who filed the last few applications. One of which required a bulldozer to remove the rubbish on the property, it was that bad (one wonders why a property inspection didn't pick this up sooner). Amazingly enough a few of the real estate agents were also chasing their letting fees. I would have thought the tenant would have been required to pay this before moving in. Yet another alarm bell ringing that was ignored.

If they had taken the time to do the checks and looked at warning signs they would have realised that this is a tenant nobody should ever rent to. They would have saved the property investor and themselves undue stress and cost.

Check your prospective tenants Tribunal history here

Check your Tenants Carefully

This week we have had two incidences that show how important it is to check tenants backgrounds before you sign on the dotted line.

The first was a tenant we currently have gave notice to vacate (following an 'ugly rent rise'). 'Hooray!' we said at the office, glad to be rid of a grotty tenant who came with the property when we took over management. That's one property we'll be glad to get cleaned up and rented out to a suitable tenant at a much increased weekly rental. However, we had not heard a peep from any prospective landlords asking about their suitability as tenants. Not one. Well, good luck to whoever takes them on, they are about to have their property declared a health hazard.

The second was a prospective tenant who applied to rent a property. They produced a glowing written reference from their landlord who was 'not contactable' having sold the property and moved overseas (yeah right). A little digging by us revealed they had forged the written reference, and had not one, but two, Tenancy Tribunal awards against them for breaching the conditions of tenancy. In my experience landlords rarely take poor performing tenants to Tribunal, so for them to have gone twice in recent history tells me they performed very poorly indeed - how many more times had they caused problems and not been taken to Tribunal? I shudder to think. If they are lying right at the start, you don't want them. If only their past landlords performed background checks. I have no doubt they will find someone silly enough to sign them up to a tenancy based on a bogus written reference.

So, if you don't know how to check a tenants background effectively to save yourself heartbreak and a great deal of work sorting out problems, or you just can't be bothered, call us to do it for you. The money and time we will save you will more than likely pay for the property management fees. And best of all, we guarantee our tenant selection, making your investment property lower risk.

Investing GREEN

We recently moved into a larger office suite to accommodate our growing team.  In renovating the new offices we had choices to make, so we chose green!

Paint for the walls was surplus, additional paint was sourced from a company with good environmental practices.  Wall paper was end-of-line.  Carpet was seconds and direct stuck to the floor to maximise its life expectancy with constant wear from office chairs.  Furniture was recycled to give it new life.  The renovation was light on new resources.

Come in and see our Green offices, and while there have a chat with us about how we can help you tread more lightly with renovations.

Rare as Hens Teeth

Most tenants are good tenants, especially the ones who go through our thorough tenant selection process.  What we are constantly shocked to discover is how few prospective tenants have ever had a credit check carried out on them.  The one thing which is impossible to tell from looking at a person is what they are like with their money.  The best dressed can be the worst spenders.  Past behaviour is a reliable predictor of future behaviour - it takes a lot for people to change their habits.  So, if you are managing your own properties, or you have a property manager, make sure your prospective tenants have a credit check carried out before you accept them as tenants. 

Once they are in your property, it is too late – you cannot legally carry out one once they are a tenant, and you can’t kick them out just because you didn’t do your due diligence on them.  If it is to confirm what you already suspect because the rent doesn’t come in regularly, well, why bother?  You should perform a credit check on every prospective tenant who consents and is likely to be offered a property.  You don’t need to check every applicant.

You can legally discriminate on a person’s ability to pay rent.  If someone has a history of defaulting on loans or credit, it is a fair bet they won’t place a priority on paying you rent.  Don’t take them.  If your property manager does not routinely carry out credit checks on prospective tenants, don’t keep them on.

We have saved our clients expense and heartache by turning down tenants with undesirable credit histories.  Want to know more?  Give us a call and we will tell you all about it. 

Residential Tenancies Act Amendments

The Residential Tenancies Act has been amended and takes effect from Friday 1st October (i.e. today!).  This has some very important consequences for landlords and tenants.  Amongst those changes are these:

• Landlords out of New Zealand for more than 21 days must appoint an agent.
• Fixed term lease renewals must be confirmed 21 days BEFORE the tenancy ends (changed from within 90 days after the lease expires).
• Property managers are now able to charge tenants a letting fee (previously only real estate agents could).  Private landlords still mustn’t charge a letting fee.
• Body Corporate rules must be provided with tenancy agreements, but any changes to those rules which adversely affect the tenancy may result in the tenancy term, or rent, being reduced.
• Boarding houses are now governed by the Act.
• Failure of the landlord to repair or properly maintain the property is an unlawful act.

The law now has more teeth to enforce breaches by tenants, such as interfering with the means to escape a fire, abandoning the property, subletting without consent, overcrowding, failure to quit the property, and threats to other people such as the landlord, agent, or neighbour.  All of these things now attract exemplary damages.


It is vital landlords know what the changes are and how it will affect their tenancies.  If you don’t know, get help from someone who does.