Becoming a landlord
Unfortunately your investment won't run itself. The worse the tenants or the older the property, the better off you are keeping a close eye on it.
As a landlord you can look forward to:
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Finding suitable tenants,
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Arranging bonds,
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Completing tenancy agreements,
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Collecting rent,
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Dealing with tenants' gripes,
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Inspecting your property regularly, and
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Arranging for maintenance and repairs.
If this sounds like too much hard work, a property management company can do it all for you. In most cases they charge a small percentage of the rental income.
Thankfully there are some more pleasant tasks, like fixing the rent.Think about:
Thankfully there are some more pleasant tasks, like fixing the rent.Think about:
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The appeal of the location - the region, town, suburb and even street will have an impact on the rent you can charge.
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What condition your investment is in.
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And how big it is.
Also:
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Check the going rate on TradeMe and local real estate agents’ sites (local papers are handy too). Try to be realistic and compare apples with apples when you are looking – it's hard to justify $500 a week for your cottage if mansions are not going for much more.
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Ask an agent or a property management company for a rent appraisal.
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Get a breakdown of average market rents in your area from the Department of Building and Housing website.
Don't forget to review the rent regularly. After all, your investment property is a business, so you should review the rent regularly and make sure your return meets your investment objectives. This can involve a bit of a trade-off though – it might be worth keeping the rent lower if it means the difference between keeping and losing a good tenant.
You can pretty much charge what you like so long as it's fair. Tenants can appeal to the Tenancy Tribunal if they think the rent is unduly high, and the Tribunal can set the rent if they agree.
Whatever you do, don't forget the insurance.
Decent insurance will cover you for loss of rent should the house become uninhabitable due to loss or damage.
You can pretty much charge what you like so long as it's fair. Tenants can appeal to the Tenancy Tribunal if they think the rent is unduly high, and the Tribunal can set the rent if they agree.
Whatever you do, don't forget the insurance.
Decent insurance will cover you for loss of rent should the house become uninhabitable due to loss or damage.
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If you decide on standard house insurance, let your insurance company know the house is a rental otherwise any claim could be rejected.
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Review your own personal insurance, particularly if you're highly leveraged.
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And convince your tenants to take out a contents policy, so they have liability cover for any major damage they cause.
Source: iwantahome.co.nz By the iwantahome.co.nz Editor
Posted: 22 Apr 2008
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