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How to attract the ideal tenants

The drive for healthy rental homes has put tenant needs in the spotlight and having the right set of amenities makes all the difference to your rental property’s value, writes Sally Lindsay.

By: Sally Lindsay

2 December 2023

  1. Healthy home: Homes rented through property managers are required to have a certificate saying they are compliant, but The Rental Bureau’s managing director, Victoria Heyes, says there is a misunderstanding of what a healthy home is. An example was after Auckland’s January floods when tenants assumed if they had wet carpets the house wouldn’t pass the Healthy Homes standards. Ironically, a home with a wet carpet still passes the standards. While most people wouldn’t consider it still a healthy home, if it has a heat pump, ventilation and ticks all the boxes, it passes the test. Because of this, property managers say there is a level of misunderstanding. Tenants believe it is unhealthy if it has a wet carpet and mould on the ceiling, and it doesn’t matter if a property manager turns up with a piece of paper to say it’s Healthy Homes compliant. What they want is the issue sorted out and the house maintained. Maintaining a house to a tenant is not handing them a piece of paper to say it’s complaint. A landlord needs to get to the root of the matter and keep on top of maintenance. Good landlords try to fix maintenance problems within two days or a week of it being reported. Tenants want to know they are able to report a problem, know if it is important, and it will be dealt with promptly.
  2. Moving into a clean property: There is some inconsistency in the Residential Tenancies Act, which states when a tenant moves out they need to leave it reasonably clean. They do not have to get the property professionally cleaned, but the expectation from new tenants is when they move in it has been professionally cleaned. Property managers and landlords have been mixed for years over the issue but have found tenants who have moved into a property that is not professionally cleaned say they have had a bad experience – even if it’s just crumbs in an oven. That bad experience can cost a landlord money. Many property managers now expect the exiting tenant to leave the home reasonably clean and the new tenant to find it professionally clean. The Rental Bureau, for example, asks the property owner to do a three-hour top-up clean using its professional cleaning company. It’s a cost the owner bears so when the new tenant moves in, it’s immaculate. It makes a massive difference and pays dividends. If a landlord has a happy tenant on day one, they tend to have a happy tenant on day 700.
  3. Reasonable rent increases: While tenants expect rent rises, some landlords are hiking their rents by 20 per cent, particularly if they haven’t made an increase in a couple of years or more. Rental owners have recently faced rising council rates, insurance and tax increases after the Labour government decided to take away their ability to deduct mortgage interest payments against rental income. Some landlords believe they can hike the rent to cover all extra expenses, but as property managers point out it always comes back to what tenants can afford. If the rent is hiked too much it will be difficult to rent the property. Property managers and landlords who know the market around the area of the rental mainly stick to a percentage formula. The Rental Bureau has a maximum of 7 per cent a year rent increases, to match whatever the inflation figure is at the time.
  4. Security of tenure: Many tenants are now asking for more than a one-year fixed term. Build-to-rent managed properties are offering up to 10-year lease agreements, but private landlords mainly offer a maximum of one-year fixed and then periodic tenancy kicks in. Landlords can opt for longer tenancy agreements, but Heyes recommends they insert a clause allowing them to increase the rent every year.

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