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.