Rents On The Rise
Landlords need to be realistic and fair when it comes to raising the rent, writes Donna Youngman.
31 March 2018
We are all aware that rents are rising and the media tells us that, in some of the bigger cities, tenants are being taken advantage of. The housing crisis, within New Zealand, is seemingly not getting any better. With the restrictions on landlords, and potential loss of incentives, it will only become harder with many investors choosing to exit property investing, leaving a further shortage of housing.
Regardless of the rule changes there will always be a need for rental properties so perhaps it is time to return to our investment strategy and put plans in place now so, when the changes do happen, we are prepared.
Ultimately, we are all hoping to provide tidy accommodation, in exchange for rents, whilst making money and securing our futures along the way. With all the rules and regulations in place for a landlord to adhere to, it must be recognised that there has to be something in it for everyone.
Should I Raise The Rent
We, as landlords and property managers, need to remain realistic and fair and avoid the mindset of “demand equals desperate tenants who will rent anything in any condition”. On the contrary. It is our responsibility both morally and lawfully, under the Residential Tenancies Act, to provide homes which are safe, secure and well maintained.
‘It is still our responsibility to have a good, sound knowledge of the RTA and act fairly and reasonably’
A by-product of looking after our investments, to a good presentable standard, is that we are able to be selective in our tenant choices, minimising our risks and achieving a higher rental return. This happens as competition arises from prospective tenants, who are competing for a property to live in. It is still our responsibility to have a good, sound knowledge of the RTA and act fairly and reasonably where our tenants are concerned.
Making The Most Of The Market
There are many substantial penalties which can be imposed by the Tenancy Tribunal for landlords who take advantage, offering sub-standard housing for exorbitant rents. So how do we make the most of the current market and increase our returns?
- Know your location. What returns are comparable properties achieving? Look out for properties of an equivalent size and standard, with comparable features and in a similar area.
- Know your target tenant. Does it make sense to charge executive rents for lower socio-economic tenants? Is the property suited to families, students, couples or otherwise?
- Advertise. Advertise everywhere you can. Use different mediums to reach a wide audience – agencies, online, social media, and corporate HR departments.
- Present the property. No matter where the property is situated, your goal should be to present it to the highest possible standard in order to get the best tenant you can to live there.
- Price accordingly within the market rental range. Make sure the rent is within the market rental range. If it’s too high tenants may have a claim for compensation. Too low may mean you allow an “unqualified” tenant to live in the property.
Lastly, make sure you get a signed tenancy agreement and payment. Nothing is confirmed unless you have a signed tenancy agreement and/ or a payment is made. The tenancy agreement is there to set out the terms of the tenancy for all parties to understand.
Donna Russell – RE/MAX Central/Russell Hardie Property Management (M) 027 223 2826 (E) [email protected] (W) remax.co.nz (W) russelhardie.co.nz “For all your Real Estate and Property Management needs”