Unfortunately though, the reality is that too many Private Landlords find themselves in compromising situations due to lack of knowledge of the RTA and lack of experience when dealing with Tenants and the Tenancy Tribunal. Sadly the cost of this inexperience can often be more than if a good Property Manager had of been in control of the situation and let’s not even get into the stress levels!!!
We (Pedersens Property Management) took on a property recently where the Landlord was left with several weeks of rent arrears, but because he had failed to serve the correct termination notice, he risked losing much more than a few weeks rent if he had of pursued this debt through the Courts. Even sadder still, because the Tenants were more than 3 weeks in arrears prior to him issuing the 42 day notice, he would have been well within his rights to apply to the Tenancy Tribunal to have the Tenancy ended and would have received a full money order for the outstanding debt. His lack of knowledge of how the system worked essentially cost him in excess 3 weeks rent.
If I were to take my accumulative experience and offer Private Landlords my top 10 Quick tips based off what I’ve learnt over the year, they would be as follows:
1. Credit Checks
Never ever rent to a Tenant without first doing a credit check – this is THE golden rule
Always inspect your property every 3 to 4 months, not only does it give you the chance to address any concerns you may have about the Tenancy, it’s also a great way to stay on top of any maintenance that is required and also an opportunity to build rapport with your Tenant and let them know what’s expected of them.
3. Rent Increases
Review and increase the rent at least once every 12 months, even if it is just $5pw. We do the bulk of our rent reviews in late January / early February when the rental market demand is at its highest.
4. Entry Inspections
Photograph or video the property before the start of every new Tenancy. It may seem like a hassle that you just don’t have time for, but trust me when at the end of the Tenancy a dispute arises between you and the Tenant about damages, you’ll be thankful that you took the time to do this.
5. Marketing Photos
Great photos of the property can be the difference between your property renting quickly or your property not renting at all. If you don’t have good photos then people won’t bother coming to have a look. Turn on the lights in each room, turn the flash on of your camera and take your photo at a lower angle (e.g. bend down when taking the photos)– you’ll be amazed at the difference it makes! Also no one needs to see a photo of the toilet.
6. Fixed Terms
Use fixed terms to your advantage to ensure that your tenancies don’t end in December and January when properties are extremely hard to rent. All of our fixed terms come off in late January / early February when demand for rentals is at its highest.
It may sound simple, but you’d be amazed at actually how complicated good communication can be. The ability to communicate effectively can be the difference between having a long and exhausting battle with a Tenant which ultimately ends up at the Tenancy Tribunal or resolving the matter quickly and amicably and moving on with life. Communicating well means being firm and knowing your rights, but at the same time empathising with the other person’s situation.
8. Friends do Tenants Not Make
As much as you may like your Tenant, do not cross the line and make them a friend. When the rent hasn’t been paid you’ll need to issue a 14 day notice immediately and cannot afford to allow any lenience because you feel friendly towards this particular Tenant. Fast forward 4 weeks and your ‘friend’ has still not paid you a cent of rent, while you may sympathise with their current circumstances you are not unfortunately running a charity. It is much easier to manage a Tenancy when you keep things professional. Have a process for handling things like rent arrears and then stick to it no matter who the Tenant is.
It can be a minefield navigating your way through the Residential Tenancies Act and interpreting what it means in layman’s terms. Be warned though, you must understand yours and the Tenants rights, failure to do so may see you end up in the Tribunal Court and wearing a fine. The DBH website is a great resource for educating yourself about the do’s and don’ts of Tenancy.
10. It’s all about the bottom line
It’s as simple as this, you are running a business and you need to make sure that the return on investment is giving you what you originally set out for.
Pedersens Property Management manages properties across North, Central and East Auckland and has recently been nominated for the LPMNZ 2014 Property Manager of the Year Award and the Best Property Management Award. On we maintain an average arrears rate of less than 1% and less than 0.5% of our Tenancies end up in the Tenancy Tribunal Court. We are committed to helping Landlords get the best out of their rental properties.