Brought up in a family of “risk averse” scientists, and with no early grounding in property investment, Claire Alderton had to forge her own path. The expat Londoner (and runner-up for NZPIF Landlord of the Year) has been an investor for 19 years. Her career has spanned property investment and property management, and she’s spent huge amounts of time educating herself around the minutiae of the trade.

Alderton was working in the film industry as an assistant director in London (“I was the youngest person in this role by around 15 years”) when she purchased her first investment property. She was 26.

She’d long been interested in the creation of wealth, and realised the financially successful people she knew had a passion for property.

Her then boyfriend had a house in the London suburb of St Margarets, and she had saved a deposit of £30,000 ($60,000) – enough to get her on the ladder.

“I saw a house in St Margarets and thought my boyfriend would be so happy to have me living in the suburb,” she shares. But while the relationship didn’t last, the investment would be her first property foray. At just £240,000, the top floor, twobedroom flat in a block of 12 featured off-street parking and its own garden. And with a flatmate she was able to live in the popular suburb for just £300 a month. “My rent at the time was double that,” she says.

Alderton moved in with her partner in 2006, renting the apartment out, and managing the property herself. But as a lover of the great outdoors, rock climbing and surfing in particular, London wasn’t the ideal place to be. So, in 2008 she and her partner upped sticks and moved to New Zealand. Before leaving she sold the rental property, making a profit of £125,000. And with other savings she had, entered New Zealand with $600,000 to spend.

Success In The South

Once in New Zealand, Alderton’s passion for property grew. After moving from a working holiday visa to one that allowed them to get permanent jobs and secure a mortgage, Alderton and her partner started to look around for places they could add value to and purchase at a good price. Often these were places no one else wanted.

She laughs when she remembers one of her earliest purchases, a rundown rental in Kapiti that had a grow room in the attic.

“You opened up a wardrobe and there was a huge cable going into the loft,” she says. “The room upstairs was lined with tinfoil.”

Alderton bought the property for just $179,000 in 2008. It had great bones, and while not on a great street in Kapiti, she was aware the area was being rejuvenated and there was potential. She was right: in the past 12 months the values in this area have grown 39.8%.

Another early purchase was a 1960s cottage, one road back from the beach at Paraparaumu. The location may have been great, but the property was falling off its piles.

“People were really put off by that, but I had an inkling that it could be fixed inexpensively,” says Alderton.

Securing the home for $155,000, she managed to get a builder to fix it for just $4,000. “I did take a risk with this, but it paid off in the end. But it could have ended up costing $40,000, so I was very lucky.”

Between 2008 and 2012, Alderton and her partner would go on to purchase eight rentals, plus a home and income.

Management Woes

Alderton had worked hard educating herself on the ins and outs of landlording. She read the RTA (“lovely bedtime reading,” she jokes), and talked to other investors at Capital Property Investors’ Association for insights into how they did things. But a drama with a tenant was to make her aware that if you don’t have your processes in place, things can go wrong.

The problem occurred in the house that had the grow room. She’d found a single mum who seemed like a great tenant, but things started to go wrong.

“She moved a boyfriend in, who was a member of a well-known gang. There ended up being $6,500 worth of damage,” she says.

“I went to my first tenancy tribunal, went through my first eviction. We ended up receiving $5 a week repayment from debt collection payments. But it taught me a valuable lesson.”

That lesson was around the importance of process. She hadn’t put the right processes in place at the beginning of the tenancy, and she realised she didn’t have the right processes in place to deal with a problematic tenant.

She needed to be educated, so set about learning the detail of managing property.

“I followed the work of David Faulkner, made friends with property managers, read books on landlording in NZ, and started documenting my own processes and procedures,” she says.

And by 2012, pregnant with her son (and the owner of a TV production company in Wellington) she set about a career shift that would see her professionalising the skills she’d learned over the years.

Management Matters

Alderton had a friend (Kate) who was working in a job she didn’t enjoy. She did the figures and realised she could cover Kate’s salary if she had management responsibility for 40 rentals. Shouldertapping investor friends, she came up with the right number of rentals to launch a business and give Kate a job. And so Rent Kapiti was born.

Alderton was in charge of the big picture stuff and Kate in charge of day-to-day running. It was a great success and gave Alderton an excellent education in the complex world of property management.

She believes that process is the key to successful property management, and it needs to be articulated in writing and strictly adhered to.

“If there is a rent arrears, send a text on the day it happens,” she gives as an example. “These rules need to be set in stone.”

She says most tenants want a lovely house to live in and to get on well with their landlords. If you try to understand the issues causing late rent, for example the tenant is paid on Wednesday when rent is required on Tuesday, there are easy ways to fix the problem.

She’s also not opposed to bringing in an unbiased professional if there are issues that get out of control.

“We have an amazing community constable in Kapiti who has helped me out a lot with neighbour issues. Sometimes there just needs to be a third party involved.”

Alderton says owning a property management business taught her so much. “A lot about being a landlord, the law and managing properties and people.”

Moving On

Alderton separated from her partner in 2016 and sold her property management business in late 2018. The pair split the rentals between them, and she now has four properties that she manages herself. All of her properties are cashflow positive and the portfolio has quadrupled in value in the 10-13 years she’s owned the properties. She acknowledges she’s been savvy with her purchase timing and is now in a position to decide whether or not she wants to work. “I am really lucky to be able to make money while I sleep,” she says.

Claire's Tip For Tenancy Tribunal

In her years as a property manager and investor, Claire has been involved in numerous tribunal cases. She has some simple advice for investors in this position.

• “The adjudicator expects you to know your stuff. Make sure you are educated around the rules of the RTA before you arrive at the tribunal.

• “Take as much evidence as you can. You won’t get a second chance and you need to be prepared. I’ve had tenants turn up with evidence at the last minute, so it’s great to have as much documentation as possible.”

• “Keep a cool head. It feels really imposing because you are going into a courtroom, but the adjudicator is there to solve issues.”