Dummies guide to rental properties?

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esawers

559 posts

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#2047409 2-Jul-2018 12:31

We manage our own properties in Christchurch, generally theres very little work to do.

We also run 'open homes' to show tenants through, we do credit checks, reference checks, and social media checks, a lot of it is on getting the right feel for the tenant as well, we had a young family lined up last time who seemed perfect, one of the credit checks came through with a blemish but would still have been ok, but after a few phone calls we just had a bad feeling. Ended up getting the perfect tenant the next week by readvertising.

Make sure you have rental insurance, not home owners insurance. Make sure you do 3 monthly property inspections to keep the insurance company happy. They still advise meth testing between tenants, and getting a baseline before they move in (even with the recent reports, they still want you to test)

afe66

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#2047435 2-Jul-2018 13:00

We rented our chch place for 8 years while overseas and then living in a different part of country.

We used property manager for entire time.

Originally made mistake of renting to friends of parents who then wanted to move out in middle of winter which caused all sorts of grief so the used property manager and it was seamless.

Having happy Tennant's is very important, we made decision to only raise rents between Tennant's rather than during tenancy. This included over earthquakes when rents all rocketed as we didn't want to create financial pressure at a time when Tennant's were worried about their jobs.

Go much do you value your time?
Do you have job where going round during day to sort out problems/tradesmen etc is doable?

Ask around for opinions of people using managers currently. We sold up 4 years ago

xontech

268 posts

Ultimate Geek
+1 received by user: 56

#2047447 2-Jul-2018 13:17

Not sure if this is still the case, but the PM's 8% is 8% of the transacted total going through your account with them. So not just rent received, anything else you ask them to manager (repairs, maintenance - lawns for eg) all incur 8% charge.

MikeAqua

8024 posts

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#2047529 2-Jul-2018 13:42

xontech:

Not sure if this is still the case, but the PM's 8% is 8% of the transacted total going through your account with them. So not just rent received, anything else you ask them to manager (repairs, maintenance - lawns for eg) all incur 8% charge.

Varies between agencies.

Mike

Wheelbarrow01

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#2048181 3-Jul-2018 11:44

Hey mate,

I have a few rentals in Christchurch. I manage two of them myself - one has been tenanted by the same guy for at least the 16 years I have owned it and he has never been any trouble in the slightest, and the other is rented by an extended family member.

For the rest I use Harcourts Grenadier. They charge 8% + gst and they charge $50 + gst for each inspection. They can also take care of any and all maintenance issues, but beware that most property managers charge you for this convenience - they usually add 10% + gst onto any invoices for work that they arrange, so a $200 plumbing job becomes $223. Not a massive difference, but it does come off your pre-tax bottom line.

One of the reasons I chose to use a property manager is that I had a run of terrible tenants, and it became clear that I was not as good a judge of character as I thought I was. They have the tools to do credit checks etc faster and easier than I can, and sometimes you ask yourself "what is my own time worth" to not have to worry about all that stuff, or of being called up at all hours of the night if and when things go wrong.

You could perhaps start doing it all yourself, but if anything goes wrong, a good property management company will be happy to take over from you if required. For example if you have a tenant who falls behind in rent and you are having trouble getting them to catch up, then by all means contact a manager to get them to take that tenant off your hands.

Property managers provide end of financial year reports which show the total rent earned, minus property management fees and disbursements (for repairs etc). These figures can be handed to your accountant at tax time, along with your own paperwork documenting your mortgage payments and any other expenses such as rates and insurance. A good accountant will maximise your deductions within the rules.

The basics of DIY property management are pretty simple - you just need to make sure that everything you do is in line with the Residential Tenancies Act. I have plenty of books on the subject if you want to borrow them - just hit me up.

Talkiet

4819 posts

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#2048219 3-Jul-2018 12:23

Wheelbarrow01:

Hey mate,

I have a few rentals in Christchurch. I manage two of them myself - one has been tenanted by the same guy for at least the 16 years I have owned it and he has never been any trouble in the slightest, and the other is rented by an extended family member.

For the rest I use Harcourts Grenadier. They charge 8% + gst and they charge $50 + gst for each inspection. They can also take care of any and all maintenance issues, but beware that most property managers charge you for this convenience - they usually add 10% + gst onto any invoices for work that they arrange, so a $200 plumbing job becomes $223. Not a massive difference, but it does come off your pre-tax bottom line.

One of the reasons I chose to use a property manager is that I had a run of terrible tenants, and it became clear that I was not as good a judge of character as I thought I was. They have the tools to do credit checks etc faster and easier than I can, and sometimes you ask yourself "what is my own time worth" to not have to worry about all that stuff, or of being called up at all hours of the night if and when things go wrong.

You could perhaps start doing it all yourself, but if anything goes wrong, a good property management company will be happy to take over from you if required. For example if you have a tenant who falls behind in rent and you are having trouble getting them to catch up, then by all means contact a manager to get them to take that tenant off your hands.

Property managers provide end of financial year reports which show the total rent earned, minus property management fees and disbursements (for repairs etc). These figures can be handed to your accountant at tax time, along with your own paperwork documenting your mortgage payments and any other expenses such as rates and insurance. A good accountant will maximise your deductions within the rules.

The basics of DIY property management are pretty simple - you just need to make sure that everything you do is in line with the Residential Tenancies Act. I have plenty of books on the subject if you want to borrow them - just hit me up.

It's a shame I can only +1 this once... One of the most helpful and relevant replies I've ever seen on the Internet :-)

Cheers - N

Please note all comments are from my own brain and don't necessarily represent the position or opinions of my employer, previous employers, colleagues, friends or pets.

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mattwnz

20515 posts

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#2048312 3-Jul-2018 13:49

I am a bit surprised that insurance companies wouldn't dictate how you rented it out. eg require you to use a property manager etc, or offer cheaper premiums if you do. I would have thought the risk of damage etc would be less if a property manager was used. Maybe you could ask the insurer for a recommendation of who you could use in our area.

DaMuzzMan67

45 posts

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+1 received by user: 25

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#2048317 3-Jul-2018 14:00

The Tenancy Website is a great resource for a lot of material: https://www.tenancy.govt.nz/

Then, there is a project I have been involved in that does cover all you need to know as a landlord: Rental Coach. https://www.rentalcoach.co.nz/

It does go into more detail about how to do your annual tax return (what is income, expenses, how to file it step by step) but also goes through all the requirements of a landlord / building and tenancy agreements etc. You can read what the course covers here: https://www.rentalcoach.co.nz/the-course/

Oh, and we are doing 50% off at the moment - ends on the 8th of July.

Cheers

Murray

xontech

268 posts

Ultimate Geek
+1 received by user: 56

#2048374 3-Jul-2018 15:51

mattwnz:

I am a bit surprised that insurance companies wouldn't dictate how you rented it out. eg require you to use a property manager etc, or offer cheaper premiums if you do. I would have thought the risk of damage etc would be less if a property manager was used. Maybe you could ask the insurer for a recommendation of who you could use in our area.

That implies that property managers do a better job at managing the property than what a landlord does. I do more regular property inspections than any of my past property managers ever did! I also maintain the property to a higher standard than what it ever was under a property manager. Basically I care about my asset more than the property managers I've dealt with did. So I don't see how having a property manager means less risk of damage.

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