First Time Investor? or Accidental Landlord?

Investor

Owning a Rental Property is a huge deal. 

Whether you purchased an investment property, or could not sell your family home, its now the time to get the property ready for the rental market. 

Though what’s the process, what checks and balances does the property need to meet before you can advertise it?

 

There is a lot to do even before you are ready to advertise the property.   With updated Residential Tenancy Laws it’s important that your property meets or exceeds the Healthy Homes Standards.  A Landlord’s legal responsibilities can feel a little overwhelming, especially for the first time Landlord.   

 

To help, we have developed a short list of boxes to tick for the first time Landlord.  This isn’t an exhaustive checklist, though it is a really good initial hit of important information to start with.   Once you read through this information, check out our other valuable information on our blog and contact us for a chat.    

 

The first-time New Zealand Residential Landlord’s checklist

  • Healthy Homes standards.  Are you compliant?  
  • Landlord insurance. What is it?
  • Terms of a tenancy agreement.  What to include
  • Advertise your property for rent. What to say, how to say it.
  • How to choose between Tenant applications
  • Sign Residential Tenancy Agreement and Tenancy Services Bond paperwork 
  • Receiving and receipting rent and bond.
  • An in depth entry condition and inspection report

 

Healthy Homes standards.  Are you compliant or not?  

To rent any residential property to a Tenant in New Zealand, a Landlord must meet minimum requirements called Healthy Homes Standards.   These standards specify the minimum requirements, such as the type of Heating, Insulation, Ventilation, Draughts, Drainage and Smoke Alarms must be present for a property to be legally rentable.  There are some scenarios where exemptions for certain standards that cannot be met are permitted. 

For all rental standards you can also see the Residential Tenancies Act.

 

Are you insured?  Get the right Insurance Policy

Like all insurances, you don’t like paying the premium, until something goes wrong.  All banks in New Zealand require insurance over a property when providing a mortgage to the property owner.  Your insurer will need to know that the property is going to be lived in by a Tenant, as that will affect the policy they provide you and the insurance excess.    

A New Zealand Residential Tenancy Agreement needs to include an insurance statement which includes details of the property owners insurance excess.  Tenants in some cases, are liable for damage to a property up to the maximum of 4 weeks rent, or the Insurance excess of the Landlord insurance policy.  Whichever is the lowest.  Talk to your Insurance company to get the right policy for your property.

 

Residential Tenancy clauses.  What to use

Both Landlord and Tenant have certain rights, responsibilities & expectations in this renting relationship.  It is legally required to have a tenancy agreement in writing.  However if an agreement is just verbal, the Residential Tenancies act can still apply.   

There are minimum requirements for a tenancy agreement to include.  Some of the basics are: 

  • Names and contact details of both parties
  • Rental property address
  • Rent payable
  • Tenancy start date and end date (if fixed term)
  • Insurance excess
  • Healthy Homes Standards statement

You as the Landlord can also include extra clauses specific to the property.  Such as:

  • Agreement around pets
  • Maximum number of occupants
  • Who maintains the grounds

 

Advertise!  It’s time to tell the world you’re ready to rent.  

Gone are the days when advertisements for rental properties were a few lines in the local newspaper.  The larger the reach of your advertisement the more people will know the property is for rent.  When priced right, with attractive photos, and a good description, people who want to live in your area will want to view your property.

Before a viewing, you want prospective Tenants to understand as much as possible about the house.  Clear looking photos and a detailed description of the features are important.

 

A few tips

Just because you have 20 photos don’t publish them all.  Choose the photos that show the best features of the property.:

  • Views
  • Modern kitchen
  • Large lounge
  • Easy access
  • Fenced section.

Features that are important for a Tenant to know if a house is worth viewing or not could include:

  • Gas hot water, never have a cold shower again
  • Gardener maintains lawns, so you relax in the garden, rather than maintain it
  • Whiteware included, so you don’t need to buy your own
  • Bedroom sizes, Single, double, king.  If it’s a small bedroom say so.

 

There is no need to show photos of the toilet with the seat up!!    The clearer the advert, the faster you advertise, the sooner you will have Tenants applying to live in your property.

We advertise our properties with the largest domains in the country, ensuring everyone who wants to live in the suburb your property is in, knows the property is available.  

 

Multiple Tenant applications?  How to choose between Tenants.    

Meeting Tenants face to face means a lot.  Building rapport, having a conversation, allows both Landlord and Tenant to build an understanding of the other.  Once you have received applications from prospective Tenants it’s time to back up your first impressions, by checking credit and personal references.  

Reference and Credit checks are expected to give a clear picture of each applicant and help you decide who would be the best fit for the property and the neighborhood.  As long as your Tenant application includes the Tenants permission, there are a small number of online credit reference agencies you can pay for access.   Calling the Tenants current Landlord and having a conversation with the other references they provide is important to know them better. 

We use a short list of questions in each conversation with a referee which builds rapport with the person giving the reference. It’s important to give honest references to other Landlords when they call you also.

 

Set up to succeed.  The paperwork.  

Once you and a Tenant agree to move in, let’s get the paperwork signed!  Using the agreement and clauses you have already settled on, both Landlord and Tenant sign the agreement and bond lodgment form.  With the Tenant paying rent and bond to your bank a/c it’s now official.  You have rented your property.  Job done!   Provide a signed copy to the Tenant, send the bond to tenancy services, and move on to the final piece of the new Tenant sign up.  The entry inspection.  

 

Entry Condition Inspection Report

This is the important final step of a new Tenant signing up.  Both Tenant and Landlord agree to the property’s current condition.  Room by room, wall by wall, chattel by chattel.  The condition and operation of each part of the property is confirmed.  This report is referred to at the end of the tenancy to compare the condition, now vs when the tenancy started.  Both parties keep a signed copy of this report.  

 

Ongoing responsibilities throughout the tenancy

Routine Property Inspections 

Depending on the frequency there are residential tenancy laws about how often a Landlord can inspect a property and what notice is required.  Ensure the frequency matches your Landlord Insurance small print.

Be responsive with communication 

Being a Landlord is a team sport.   Like any relationship you have in your personal or business life, being difficult to contact can affect your Tenant relationship.  Possibly meaning you don’t hear about maintenance problems until you see them yourself at inspections.   The same is true for Tenants.   Ensure both parties have multiple ways to contact the other, including emergency contacts.

Maintenance and Renovations

When part of your property needs maintenance, fix it!.  Arrange the work as if it were your own home, within a reasonable time frame.  Your property is your asset.  Keep it maintained to reduce chances of structural damage.  Consider developing a long term maintenance plan to plan for larger renovations and repairs, such as replacing the roof, and painting the exterior.   If you look after your property, your Tenants will also. 

As in all types of business, rules and Legislation can change.  Whether you are a new or experienced Landlord, it’s important to constantly keep informed.   

Where your life is busy, consider employing a Property Manager to ensure your property is compliant, maintained and rented to a high caliber of Tenant for the long term.

Reach out, contact us, we would love to chat.   See how other first time Property Investors love working with Copo!

Leave a Reply

Your email address will not be published.

58 − = 50