Ten year tenancies are back in the news and also in the discussion on PropertyTalk.com. On the news site stuff.co.nz an article reports Auckland Property Investors Association (APIA) have called for a change in the fixed term tenancy agreements offered to residential tenants.
Maybe it is time for longer term tenancies of up to 10 years and these agreements would offer tenants more flexibility but also more responsibility similar to commercial leases. Tenants would be able to improve the property cosmetically by painting, changing floor coverings, window coverings etc., have pets and get the rights on renewal but they’d also need to take care of some of the property’s maintenance.
Property investors would potentially be in a better position too with the longer term tenancy agreements. They’d have less maintenance and refurb costs and more income security to invest in more properties. In the Stuff article APIA’s vice president says there’d be a few residential property investors whom could even grow a substantial business that could eventually list on the Stock Exchange like commercial property investment companies.
There’s no denying the potential growth for professional property management firms like Pedersens Property Management. More investment properties under longer term agreements would offer continuity of both tenant and landlord.
Good on APIA for making the suggestion. Property investors on PropertyTalk have been discussing longer term tenancies for some time and they say it will be quite some time before it gains traction here in New Zealand. A Pedersens Property Management spokesperson agrees, Landlords would need to be happy relinquishing some control over their property and tenants would also need a paradigm shift in their role as a tenant. Most tenants prefer the flexibility of much shorter fixed term agreements and periodic is still their overriding preference. Plus they don’t want responsibility for maintenance. Longer term tenancies may not see the light of day any day soon.
This blog article was written for PropertyBlogs by Mobilize Mail.