For many tenants and landlords, it is unclear what steps to take when facing tenancy issues. If you are uncertain about your legal entitlements, this article is for you. We are here to help by listing the most common situations that often lead to disputes in the Tenancy Tribunal and providing guidance on the steps you can take to address them.

Tenancy Services

Tenancy Services are an agency of the government. They offer information and support to tenants, landlords, and their agents, and make sure they understand and follow Residential Tenancy Act 1986.

Tenancy Tribunal

The Tenancy Tribunal is a court that holds hearings to make decisions on problems between landlords and tenants who have not been able to reach agreement in mediation.

The Tenancy Tribunal and Tenancy Services deal with disputes about residential tenancies.

Reasons to initiate a Tenancy Tribunal hearing

Disputes can arise over a range of issues, such as rent, repairs and maintenance, bond refunds, and eviction notices. Common disputes between tenants and landlords include:

• Rent arrears: Disputes can arise if a tenant falls behind on their rent payments.
• Damage to property: If a tenant has caused damage to the property beyond normal wear and tear, the landlord may apply to the Tenancy Tribunal to seek compensation for the cost of repairs.
• Rent increases: If a landlord wants to increase the rent, they must follow specific rules and regulations. If a tenant believes that their landlord has not followed the rules, they may apply to the Tenancy Tribunal to dispute the rent increase.
• Repairs and maintenance: Disputes can arise over the responsibility for repairs and maintenance of the property. Landlords are generally responsible for maintaining the property in a reasonable state of repair, while tenants are responsible for keeping the property clean and tidy.
• Health and safety issues: If there are issues with the property that pose a health or safety risk to the tenant, they may apply to the Tenancy Tribunal to force the landlord to fix the issues.
• Bond disputes: If there is a disagreement between the landlord and tenant regarding the return of a rental bond, either party may apply to the Tenancy Tribunal to resolve the dispute.
• Breach of tenancy agreement: If either the tenant or landlord breaches the terms of the tenancy agreement, the other party may apply to the Tenancy Tribunal to seek resolution or compensation.

These are just a few examples of the reasons why a tenant or landlord might choose to initiate a Tenancy Tribunal hearing in New Zealand.

Steps to take in resolving disputes

If there are conflicts arise between a tenant and landlord in New Zealand, Tenancy Services recommend the following steps to take.

• Discuss the issue: The first step in resolving a dispute between a tenant and landlord is for the parties to discuss the issue and try to find a solution. It is very important to find out about your rights and responsibilities, and follow the processes set out in the RTA 1986, its Regulations, and other Amendments, and communicate with each other.
• FastTrack Resolution: A fast way to formalise the agreement reached between tenants and landlords after a dispute is FastTrack Resolution, which is a service provided by Tenancy Services. If the landlord and tenant have a discussion and agree on what will happen, the landlord can let the tenant know that they are going to apply for FastTrack Resolution to formalise the agreement and then apply online.
• Mediation: If the parties are unable to resolve the dispute through discussion, they can try to resolve the dispute through mediation. They must make an application to the Tenancy Tribunal.

Tenancy Services will arrange mediation services, set up a mediation meeting and provide a mediator. This may be a phone conversation or a meeting in person. During mediation, a mediator helps everyone discuss the problem, identify the issues, and produce a workable solution. Mediators know a lot about tenancy issues, but they don’t decide anything for you.

When an agreement has been reached, the mediator checks that each person fully understands what they are agreeing to. The agreement is usually written down as a mediated order which the mediator signs. Each person is given a copy of the mediated order.

A mediated order is legally binding and will usually say what happens if it is broken. If either person doesn’t do what was agreed, then the mediated order can be enforced as if it was an order of the Tribunal.

In some situations, mediation will not be an option and an application will go directly to the Tenancy Tribunal. For example:

1. the tenant has assaulted or threatened to assault the landlord’s family or agent, other tenants or neighbours.
2. where the tenant has been found to have abandoned the tenancy.
3. where the tenant has substantially damaged the property or is threatening to do so.

• Tenancy Tribunal: If mediation fails, the parties can apply to the Tenancy Tribunal for a resolution. The tenancy Tribunal appoints tenancy adjudicators, who can formalise what is agreed at mediation or can make a ruling on an issue that can’t be resolved an issue an order that is legally binding on the parties involved in the dispute.
• District Court: If the parties are not satisfied with the decision of the Tenancy Tribunal, they can either apply for a rehearing or appeal to the District Court for a review. The District Court can make a decision on the dispute, which is binding on the parties.

It’s important to note that there are specific laws and regulations that govern the relationship between tenants and landlords in New Zealand. These laws cover issues such as rent, bond, repairs and maintenance, and eviction. If a dispute arises between a tenant and landlord, it’s important to seek legal advice and follow the appropriate dispute resolution process.

Also, if you are a landlord, watch this highly informative video about what you should not do as a landlord:

More tips

• Fill in the Tenancy Tribunal application form as precisely as possible. You can find it online on this page.
• Do a Tenancy Tribunal check online. Read and analyze Tenancy Tribunal orders similar to your case. Head to the Tenancy Tribunal database to do this.
• For Tenancy Tribunal mediation, hire a Property Manager. CGPM Property Managers offer expert Tenancy Tribunal mediation services.
• If you’ve lost the case, don’t worry: apply for a Tenancy Tribunal rehearing instead. This is a hearing that you can apply for if you think the decision made was wrong legally. You have 5 working days after a decision is issued to apply for a rehearing.
• Find more tips about winning a Tenancy Tribunal hearing in this article.

The post How to deal with disputes about residential tenancies? appeared first on Clarke Group Property Management | Auckland Property Management.

Are you at your wit’s end with your tenants’ late rental payments? Or maybe you want to know how to evict someone who doesn’t pay rent? You’re not the only one. Landlords often do not know how to approach this situation, whether for fear of conflict or not being sure about their legal rights.

If you want to find out how to handle tenants who pay rent late, read on. We will cover all possible scenarios and recommend the legal way to deal with them. We will also answer landlords’ most frequently asked questions. Keep reading to discover:

• How to deal with late paying tenants;
• Your and your tenants’ rent rights and responsibilities;
• How to get help for every possible rent-related scenario out there.

Rental payment schedule

Rental payment conditions

Any rental payment conditions relating to property damages and wear and tear are mentioned in the tenancy agreement. Some common examples include:

• Not allowing tenants to smoke in the house.
• Limiting the number of people allowed to live in a house.
• Forbidding parking cars in certain areas of a property.

Reasons why tenants may refuse to pay rent

Tenants are legally responsible for paying the rent. If they don’t, they incur a late rental payment fee. Yet, on occasion, they might refuse to do so for reasons such as:

• They are waiting for the landlord to conduct promised repairs.
• One of the multiple tenants is unable to pay for their part of the rent.
• The tenants’ financial situation means they cannot afford it that month.

In the two first scenarios, tenants will still have to pay rent. They are most likely to receive a late rental payment notice from their landlord. In the last scenario, it is up to the landlord whether they want to negotiate a solution with their tenant.

Naturally, landlords will not be happy to hear that their tenants are refusing or are unable to meet their obligations. You may be feeling angry at the prospect of not getting paid, but you should act rationally. Try calming down and following our bulletproof plan for resolving the situation in the best manner possible.

If you can’t calm down, you can even call the police – this was exactly what the landlord did in the video below! Watch how the non-paying tenant explained the situation:

If tenant doesn’t pay rent: resolving the issue on your own

So your tenants always pay rent late and you want to attempt to resolve the issue on your own. Here are your options:

1. Exchanging emails, letters, or text messages

Message the tenant by email, letter or SMS and tell them the solution that you propose.

The advantage of this method is that, with written communication, you have a record of what was said and promised. This could be useful if things escalate to the Tenancy Tribunal after sending the relevant letter of demand for rental payment.

The problem is that this method lacks urgency and is impersonal, while it also means that you’re not in control of how long it takes to receive a reply.

2. Personal meeting

If your tenants won’t pay rent, talking face-to-face is the most direct way to resolve the issue. It is quicker than sending a letter too.

However, if you are not well prepared for the meeting and don’t know your rights and responsibilities in advance, there’s a chance it could lead nowhere, and you’ll have to follow up.

To prepare for a tete-a-tete meeting with your tenant, read the self-resolution guide offered by Tenancy Services first.

Reaching an agreement

If your communication efforts are successful and you do manage to reach an agreement with your tenant, here’s what to do:

• Write down what you’ve agreed, then sign and date it.
• Arrange a follow-up meeting to check how things are going.
• Apply for FastTrack Resolution if you want to formalize your agreement.

Tenant can’t pay rent: going to the Tenancy Tribunal

If after your efforts, your tenant refuses to pay rent still and you haven’t reached an agreement, these are your options:

• If your tenant owes less than 21 days rent, you can issue a 14-day notice to remedy, giving the tenant two weeks to fix the problem.
• If your tenant doesn’t remedy overdue rent or if they owe 21 days of rent or more, you can apply to the Tenancy Tribunal to either organize mediation or a court hearing to terminate the tenancy.

If you have written a letter to tenant to pay rent on time but they won’t cooperate and you need advice, you can always call Tenancy Services.

Notice to remedy

A notice to remedy is a notice given by a landlord or tenant when they believe the other party has breached the tenancy agreement.

In the case of rent arrears, it is essentially a demand letter for rental payment. It gives the tenant 14 days to fix the breach.

For a notice to pay rent or quit template, head here.

When to apply to the Tenancy Tribunal

It is time to apply to the Tenancy Tribunal when you have exhausted your other options to resolve disputes with your tenants. A landlord could apply to the Tribunal, for example, in the following situations:

• When a tenant does not pay rent for more than 21 days;
• When a tenant needs to pay for damages caused to the property;
• When there is disagreement about repaying the bond.

Where to apply to the Tenancy Tribunal

Landlords can apply to the Tenancy Tribunal online by filling in an eviction notice for failure to pay rent form. The application process is simple and does not take longer than ten minutes, but you will need to have readily at hand and be prepared to submit all necessary documentation.

You can also make an application on paper to send in your failure to pay rent form. The application fee is $20.44 (including GST).

Evicting a tenant for multiple cases of overdue rent

Applying to the Tenancy Tribunal to terminate a periodic tenancy

Recent amendments to the Residential Tenancies Act (RTA) mean that landlords can now apply to the Tenancy Tribunal to terminate a periodic tenancy in certain situations. Before applying to the Tribunal, a landlord will have issued the tenant with 3 written notices:

1. If, within a 90-day period, rent that was due has remained unpaid for at least five working days, the landlord may issue a first notice.
2. A second notice is served if rent falls due again and has not been paid within 5 working days of the second due date.
3. A third notice can be served in the same way as a second notice.

After all notices have been served and, within 28 days after the third notice was given to tenants, landlords can file an application to the Tenancy Tribunal.

Example

Below we explain how landlords are to send their pay rent or quit notice in a real example scenario. Note that to estimate the following, we are using an assumed rent payment date of Tuesday March 1st and that in our example tenants are paying rent on the 1st of each month.

• Date when the rent is due: Tuesday March 1st:

Landlords will be expecting payment from their tenants on the date the rent is due. If this day passes and, for the first time, their tenants haven’t paid rent, landlords will have to start considering sending a gentle pay rent or vacate notice.

• Date of the 1st notice: Tuesday March 8th:

Five working days after the rent due date, landlords can issue the first notice to tenant to pay rent, along with a separate 14-day notice to remedy.

• Date of the 2nd notice: Friday April 8th:

Following the second occasion of rent remaining unpaid for five working days after the rent due date, landlords can issue a second notice from landlord to tenant for failure to pay rent.

• Date of the 3rd notice: Monday May 9th:

Similarly to the first and second notices, the third notice to pay rent or vacate form is sent on the third occasion of unpaid rent five working days after the rent due day.

• Dates when the landlord can apply to the Tenancy Tribunal: Tuesday May 10th – Thursday June 16th:

Once three notices of overdue rent have been issued within a 90-day period, the landlord can apply for termination. Landlords have to do this within 28 working days from serving the third notice to their tenant.

How to avoid late rental payments in future?

If you want to avoid late rental payments by your tenants, it is recommended to:

• Always check their credit to ensure they have a good record of rental payments prior to renting to them.
• Make your expectations clear when it comes to rental payments when you’re signing the tenancy agreement.
• Keep a good record of your tenancy-related documents so you always know when rent is due.
• Call your tenants as soon as a rental payment has been missed.
• Use a mediator to communicate with problematic tenants to show them you are taking the situation seriously.

Overdue rent: FAQ

If you are a landlord and your tenant doesn’t pay rent, don’t despair. Landlords can now take steps to legally terminate tenancies for rent arrears, and the process is simple. When you are renting your property, it is important to stay up-to-date with rental laws and be aware of what your rights and responsibilities are.

Before you apply to the Tenancy Tribunal, you will need to issue your tenants with the appropriate notices for rent arrears. You will need to have patience, as the whole process from first notice to a Tenancy Tribunal application takes a while.

If you have questions about late rental payments or anything tenancy-related, do not hesitate to contact CGPM. As Auckland’s leading property managers, CGPM’s team is qualified to provide you with professional, expert advice for your property management needs.

Below we answer landlords’ most common questions.

1. By law, when is the last day to pay rent?

If you do not pay rent within five working days of its due date, you will be sent a 14-day notice to remedy, giving you two weeks to pay the overdue rent.

2. How to remind a tenant to pay rent?

To politely remind a tenant to pay rent:

• Contact them to ensure they know what day the rent is due and how much is owed.
• Remind them in writing how they can pay rent, by telling them which payment methods are accepted for example.
• Encourage them to contact you directly if they are facing difficulties paying the rent.

3. Can I postpone the rental payment until the next month if my tenant can’t pay rent this month?

It is up to a landlord’s discretion whether they will be flexible enough to allow postponing rental payment until the next month. If a landlord does accept to postpone rental payment, they should make a written agreement with their tenants about this so that there is a record.

4. What to do if tenant doesn’t pay rent?

If a tenant doesn’t pay rent, landlords can issue them with notices and then apply to the Tenancy Tribunal for termination of the tenancy.

5. What to do if the tenant didn’t pay rent and left?

Just like a landlord would have to send a tenant a pay rent after eviction notice, they have to resort to legal avenues if a tenant leaves a property without paying rent. Having rental payment insurance comes in handy in this scenario.

6. If someone doesn’t pay rent, can you kick them out?

After serving the tenant with the relevant notices and applying to the Tenancy Tribunal, landlords can eventually kick out tenants who refuse to pay rent.

The post Can I kick someone out of my house if they don’t pay rent? The legal scenario appeared first on Clarke Group Property Management | Auckland Property Management.

Landlords have many worries, and a common concern is bond money. Where does it go? How can you get it in case your property is damaged? We are here to provide all the help with rental bond information that you may need. We will explain where bond money goes and how to get the maximum of it back. Read on to learn:

• what Tenancy Services say about rental bonds;
• how to pay bond;
• what to do to ensure you are getting bond money back in full.

Bond money definition

To define bond money, one could say a rental bond is a deposit that tenants pay a landlord when they move into a property. The bond is held by Tenancy Services and refunded after a tenancy has ended.

For better undrestanding, watch this nice video of the two cute houses explaining the gist of renting!

Rental bond NZ: What can it cover?

The rental bond can cover situations such as the following:

• Unpaid rent: If a tenant owes rent to the landlord, the landlord will keep the rental bond money.
• Damage to the property: If a tenant has damaged furniture or another part of the property, the landlord will use rental bond money for repairs. Bond money returned to the tenant will be what is left over.
• Outstanding utility usage: If it is established that a tenant hasn’t paid for utilities, e.g. electricity or Internet bills, upon the end of the tenancy, the rental bond will be used by the landlord to cover these expenses.

Minimum and maximum bond

The maximum rental bond payment amount a landlord can ask for is 4 weeks’ rent, while the minimum is 1.

Increasing or decreasing the bond: When does it happen?

A landlord can increase or decrease the bond only in one of two situations:

• If the rent is increased. A landlord may ask the tenant to pay additional bond, in accordance with the increase. However, bond payments can only be increased once in a 12-month period and landlords must provide tenants with one month’s written notice.
• If the rent is decreased. If the rent of a property has decreased, the tenant can apply for a refund of the extra bond that has been paid.

Asking a new tenant to pay a bond: Is it compulsory?

Even though most landlords ask for a bond, it is not compulsory.

Advantages of bond lodgement

Not lodging a bond is unlawful and can get landlords in serious trouble. Landlords will find that lodging the bond guarantees that their money is kept safe for the duration of tenancy and that it gives them a sense of security that they will have money to cover property-related expenses.

Bond lodgement NZ

Lodgement of bond means that the bond paid is transferred to Tenancy Services until the end of the tenancy.

When should the bond be lodged?

The bond payment date, i.e., when it must be lodged with Tenancy Services, is within 23 working days after it is received.

Bond lodgement form NZ

For a free bond lodgement form template, head to this website.

Signing bond lodgement forms

Both the landlord and tenant(s) need to sign the bond lodgement form.

Keeping document records as a landlord

Landlords should keep the bond lodgement form, as well as all documents related to a tenancy, for at least 12 months after the tenancy ends. For tax purposes, landlords will need bond records for 7 years after the tax year to which they relate. Keeping these documents can be useful for landlords for:

• Clearing up any issues related to the tenancy.
• Being prepared for a Tenancy Tribunal hearing, if necessary.
• Providing requested documentation to the Ministry of Business, Innovation and Employment, under the Residential Tenancies Act.

How do you pay a bond?

The bond is paid by the tenant to the landlord or property manager before they move into a rental property. It can be lodged with Tenancy Services by either of these parties.

Bond Payment NZ: Available payment forms

You have several methods for paying a bond.

• As a tenant, you can pay bond online if you are lodging a single bond for 6 tenants or less. You can use a credit card, which is useful for individuals who may need rent bond assistance.
• Landlords and property managers can pay by:

1. Direct debit: if they often lodge multiple bonds at a time. This option is preferred by those who don’t want to pay large bank fees.
2. Direct credit: if they lodge a bond for more than 6 tenants. This is the fastest option to pay.

You can pay rental bond online on the Tenancy Services website, using the bond lodgement tool.

Rent bond refund NZ

Rent bond refund is when bond money is returned at the end of a tenancy. Depending on the state of the property and any outstanding costs, tenants will either receive the full amount back, part of it or nothing.

Inspecting the property BEFORE signing the bond refund form

Landlords and tenants should remember it is crucial to inspect the property, ideally together, before signing the form for return of bond money. This is to ensure that everything is in order and no damages have been caused for which deductions from bond money would have to be made.

The bond money is:

• returned fully:

1. If the property is tidy and undamaged and no rent is due.

• returned partly:

1. If minor damage to property, like holes in the walls, is found.
2. If less than a month’s rent remains unpaid, in case of a 4 weeks’ rent bond.
3. If there is an outstanding utility bill that adds up to less than the bond amount.

• not returned at all:

1. If the cost of damages to a property exceeds the amount of the bond, e.g. if tenants have destroyed expensive appliances.
2. If the cost for cleaning the property professionally at the end of a tenancy exceeds the bond amount. This is common when tenants ruin carpets, for example.
3. If tenants have made alterations to the property without the landlord’s consent and the cost to change them back exceeds the bond amount.

Disagreements about the refund amount

There are sometimes situations when landlords and tenants can’t reach an agreement on the refund amount. In this case, they can either use a mediator or apply to the Tenancy Tribunal. This can be necessary in instances such as the following:

• Disputes about whether damage predates a tenancy.
• Disputes about the cost of repairs to cover damages.
• Disputes about the tidiness level of the property.

Bond refund forms

Need a bond refund form? Visit this page.

Signing bond refund forms

The bond refund form must be signed by the same people who signed the bond lodgement form, i.e., all named tenants and landlord. If it isn’t, it could cause delays in issuing the refund.

What happens if a tenant or landlord can’t sign the bond refund form?

On occasion, one of the people who signed the bond lodgement form is not available to sign the refund forms. This could be because:

• They have already moved away.
• They have passed away.
• They are travelling.

In these cases, landlords and tenants are advised to complete the form and send it to Tenancy Services anyway. Tenancy Services will attempt to find a solution.

Keeping the bond refund document

Landlords should hold on to documents for several years following a tenancy because:

• They will need them for tax purposes.
• They will need them in case they have to apply to the Tenancy Tribunal.

Sending the bond refund form to Tenancy Services

In order to get a refund, the bond refund form must be received and acknowledged by Tenancy Services, or it can’t be processed.

Bond money NZ: When does it actually come back?

It is currently taking up to 5 working days to refund a bond when a fully completed form is received.

Unclaimed bond

Unclaimed bond money becomes the property of the Crown 6 years post-tenancy.

Bond lodgement FAQ

You may be confused by bonds as a landlord, but you don’t have to be. Staying up-to-date with legislations and knowing when and how to send in your bond lodgement and bond refund forms is key for success.

CGPM can streamline this process for you and offer help with bond money lodgement queries and any other questions you have. Don’t hesitate to contact CGPM’s expert real estate team for all your property-related needs.

Below we’ve gathered landlords’ most common questions concerning bond lodgement:

• What is bond money used for?

Bond money is used by landlords to cover expenses, such as unpaid rent or repairs due to damage to the property.

• Where does bond money come from?

The tenant pays the bond to the landlord. The bond is then lodged with Tenancy Services.

• How much of a bond do you have to pay?

Landlords normally ask for at least 1-2 weeks’ rent as bond. By law, they can ask for up to 4 weeks’ rent.

• When to pay rental bond?

Tenants must give bond to landlords before they move in. This must then be lodged with Tenancy Services within 23 working days.

• How to pay bond?

You can pay bond online, by direct debit or credit.

• Can you pay bond with a credit card?

Yes, you can pay for bond with a credit card.

• How to pay a bond online?

To pay bond online, go to this page.

• What happens to bond money? Where does my rental bond go?

The bond money is held by Tenancy Services for safekeeping until the end of the tenancy.

• Do you get bond money back?

If there’s no unpaid rent or other outstanding property-related costs, a tenant should get their bond money back fully.

• When do you get your bond money back?

Once the bond refund form has been signed by both the landlord and tenant(s) and sent off, you should get the money within ten working days.

• How to get bond money back?

In order to get bond money back, submit your bond refund form with the Tenancy Services.

• How long does it take to get bond money back?

It normally takes up to 5 working days to refund a bond when a fully completed form is received.

The post Where does bond money go? All you need to know before renting out your property appeared first on Clarke Group Property Management | Auckland Property Management.

Are you having a hard time figuring out what to charge for your rental property? Deciding on the right amount of rent is often difficult for landlords. If you want to learn what is market rent and how to set the right price, you have come to the right place. We will tell you what factors to consider in order to ensure you are charging your tenants fairly. Read on to find out:

• what factors influence market rent;
• why you should resist the temptation of overcharging and charging below market rent;
• how to calculate fair market rent.

To get started, watch this helpful video:

Market rent

Market rent is the rental amount deemed reasonable for both a landlord and tenant when it comes to a tenancy. This amount must be similar to what is charged for the same type of properties in similar locations.

Fair market rent

A fair market rent definition is: a method of calculating the level that rent should be set at for a property, i.e., by estimating the 40th percentile of gross rents for standard quality units based on recent move-in data.

Why landlords shouldn’t overcharge

While as a landlord, it may be tempting to charge a little extra for renting your property, this is not a good idea because:

• Overcharging can result in being investigated under the Tenant Fees Bill: Landlords can be asked to submit evidence to back up their fees and charges.
• Properties with rental levels set well above fair market rent value can be very hard to let: Empty properties are the worst-case scenario for landlords as they produce no income, and costs can mount quickly. Overcharging is the most common reason a rental property will stand empty.
• Overcharging means tenants are unlikely to stay in a property for long: If tenants think they are not being charged fairly, they are likely to look for a better deal and vacate a property as soon as their lease allows them to.

Why landlords shouldn’t undercharge

You may be surprised to learn that undercharging can actually be just as bad for you as landlord as overcharging. This is because:

• Landlords can face below market rent tax consequences: If you are not making profit from renting your property, you will not be eligible for tax deductions related to it.
• Undercharging tenants means losing money each month: Undercharging obviously decreases rental income and can result in landlords losing money on their property, as they will still have maintenance expenses.
• Landlords who undercharge do not have a void period “safety net”: Landlords always face the risk of some void periods, i.e., periods with no tenants, so they should always ensure to maximise their income while they can.

Key factors that influence market rent

Current market rent is determined by various factors. These include, but are not limited to, the following:

• Property type: Generally, properties are divided into several set categories. It is important to distinguish between different types of property when deciding what is fair market rent for a property, so as to charge appropriately:

1. house/townhouse (a self-contained property usually with land)
2. apartment (a property with self-contained and shared areas)
3. boarding house room (in a property shared by 6 or more people)
4. room (in a property shared by less than 6 people)
5. bedsit (a one-roomed unit consisting of a combined bedroom and a sitting room with cooking facilities)

• Location: Where a property is located is one of the most important factors affecting rental rates. Landlords renting properties that are close to amenities and transport hubs, in safe areas, will be able to charge more on “the market rent scale”.
• Interest rate: As the real estate market heavily relies on mortgages, when interest rates rise, rental prices tend to fall. This will play a role in how to determine fair market rent and, thus, how much landlords can charge for their properties.
• Inflation: Inflation will increase rental prices, since high mortgage rates mean less home purchasing power and, therefore, higher demand for rentals. Landlords wondering how to determine market rent must keep up with inflation statistics.
• Supply and demand: To answer “what is the market rent for my property”, landlords have to consider supply and demand in their area in a particular period of time in order to decide what to charge. If a type of property is in short supply in an area, then rent will be higher than average.

Methods for defining the rent amount

To answer “what is fair market rent in my area” and figure out the rental amount you should be charging, you can use one of the following methods:

1. Analyzing rental bond data on your own

You can use rental bond data to determine the ideal rent amount. This data provides information on the activity level in the housing rental market since 1993. Analyzing it will give you an idea of what private sector landlords’ bonds were, starting from January 1993.

The advantage of this method is that it is free and contains a depth of information going a long way back. However, you could possibly make mistakes if you’re not careful and don’t analyse the latest available file, as there are some technical particularities with the database.

2. Analyzing MBIE market rent data on your own

Studying Ministry of Business, Innovation and Employment (MBIE) data can also help you determine rental price. MBIE publishes rental price data, which is used in regional housing reports and other publications.

The advantage of this method is that it will give truly reliable data, as every landlord that receives a bond is required to lodge it with MBIE. However, the data does not distinguish between furnished and unfurnished properties, which is something that also affects rental prices.

3. Analyzing TradeMe market rent data on your own

Using data from the Trade Me Property website can also help landlords figure out what they should be charging. Trade Me Property produces data on median rent statistics.

The advantage of this method is that it is straightforward and reliable, coming from New Zealand’s biggest property website. However, one should remember that it only captures the weekly rent for new rentals on the market for individuals who choose publicly advertised rentals, not private ones.

4. Using the online market rent calculation tool offered by Tenancy Services

The online tool on the Tenancy Services website is another way to calculate what market rent should be for a certain property type. The tool acts as a fair market rent database that provides bond information for properties.

The advantage of this method is that it automates rent calculations, so landlords only have to input some simple information instead of doing a complex market rent analysis. The website does specify, though, that this data should not be used alone to determine one’s rent – more factors need to be taken into consideration.

When using the online tool, you will encounter the following terms:

• Size: Number of bedrooms in a property.
• Active bonds: The number of bonds received that had complete information about weekly rent, house type and other factors in that six-month time period.
• Lower quartile: The weekly rent at 25% of all market rents.
• Median rent: The middle value when all of the weekly rents are placed in order of value.
• Upper quartile: The weekly rent at 75% of all market rents.

5. Consulting a Property Manager

If you do not want to analyse data on your own, as a landlord, you also have the option of consulting a Property Manager.

Some advantages of this method are the following:

• A Property Manager will expertly analyze past and current rental data from your area, eliminating guesswork.
• When determining the right rental price, a Property Manager will be able to correctly factor in landlord costs and property expenses, like maintenance and repair costs.
• A professional Property Manager can also help landlords lower their property-related expenses, due to their contractor connections, and, therefore, maximise their profits.
• Working with a Property Manager means landlords don’t have to worry about consistent cash-flow, as rent will always be collected on time.
• Hiring a Property Manager guarantees that landlords will stay up-to-date with legislations that could affect rental rates and, thus, will always be adjusting their prices and charging appropriately.
• Shorter periods of vacancy. Not only will a property management company advertise to fill vacancies, but it will also maximize revenue.

Market rent FAQ

1. How to calculate market rent?

For a fair market rent calculation, you will need information on your home’s value. Your rent is typically around 0.1% of its value.

2. Where can I find a good fair market rent calculator online?

To use a fair market rent calculator online, head here.

3. Does fair market rent include utilities?

Fair market rent includes essential utilities, like gas or electric, on top of rent but it does not include non-essential ones.

4. Does charging less than fair market rent result in extra taxes?

Renting below market rate means you are not eligible for tax breaks related to the rental use of your property. If you are not making a profit, you will not be able to deduct certain rental expenses.

5. What does mid-market rent mean?

Mid-market rent refers to homes for rent to households on low incomes. Mid-market properties are rented at lower-than-average prices.

6. What is market rent vs contract rent?

Market rent is also known as face rent, and it is the rental price that your unit would get right now if it were to be listed. On the other hand, contract rent is the amount actually paid right now by long-term tenants. This amount is normally lower than market rent rate.

7. What is market rent vs effective rent?

As explained in the market rent definition above, this is the rental amount payable as set out in the lease agreement or rental price listed by the landlord. Effective rent is this amount a landlord receives after paying all expenses for related to operating the property.

Set the right price!

Deciding what to charge for your rental property as a landlord is not an easy task. If you overcharge, you could lose the trust of your tenants, but if undercharge, you could be shooting yourself in the foot. When it comes to rental prices, you need to find that sweet spot that ensures you are making profit, but your tenants are also happy.

There are several ways of calculating fair market rent by yourself online, but if you need expert help, click on the FREE RENTAL APPRAISAL link.

The post What is fair market rent in my area? Financial issues explained appeared first on Clarke Group Property Management | Auckland Property Management.

While you may think of landlords as experienced know-it-alls when it comes to rental rights and responsibilities, few of them actually know their lawful obligations. It’s true that the information on the Residential Tenancies Act NZ can be a lot to digest at once, but we are here to make your life easier! We will enlist the most important parts of the Act for you. Specifically, this article will serve as a guide to the Residential Tenancies Act and tell you:

• who the Act protects and who it doesn’t;
• examples of real-life living arrangements covered by the Act;
• how to ensure you stay up-to-date with changing regulations.

What is the Residential Tenancies Act?

The Residential Tenancies Act (otherwise referred to as ‘the Act’ or ‘RTA’) sets out the rights and responsibilities of landlords and tenants who rent residential properties in New Zealand.

The main purpose of the Residential Tenancies Act

The RTA is the law made to protect tenants and landlords in New Zealand. Its main purpose is to facilitate relations between landlords and their tenants by ensuring they comply with tenancy laws for the duration of the tenancy.

Updates and major amendments

The Act was issued in 1986 but it is often updated. The latest changes to Residential Tenancies Act regulations took place in stages, from August 2020 to February 2021.

Residential Tenancies Act sections

The Act consists of 5 parts, namely:

1. Application of Act
2. Boarding House Tenancies
3. Tenancy Tribunal
4. Administration
5. Miscellaneous Provisions

You can obtain the text in paper, but also read its online version on the NZ government’s official website.

You can also find plenty of important information in this awesome video:

Contracting into the Act: What it means

If an individual is in a renting situation not covered by the Act, they can choose to contract into it. They will have to determine which part of the Act applies to their situation and have a written agreement created that clearly describes how everyone is to ‘contract in’ (e.g., what sections apply).

Why landlords and tenants may want to contract into the Act

If you are a landlord or tenant that is in a living situation not covered by the Act, you may want to consider contracting into it because:

• If a dispute arises, the Act will ensure that the parties involved will be able to apply to the Tenancy Tribunal.
• If you are a landlord, you will have peace of mind by knowing your tenants will be kept legally responsible for keeping the property clean and paying rent on time.
• It will help you budget properly, as expenses and earnings, like rent increases/reductions and payments will be laid out clearly in advance.

Who IS protected under the Residential Tenancies Act?

Tenants

A tenant is someone who rents a house from a landlord. This could be an adult renting an apartment, a family with children renting a house, or a couple renting a property to live in long-term.

• The Act outlines NZ tenant rights and responsibilities.
• The Act provides tenants with a system for helping resolve tenancy disputes.
• When multiple people rent a house to live in together, they all become tenants together.

Boarding houses

A boarding house is a property for six or more tenants, where unrelated tenants each rent a room and share facilities, such as the kitchen and bathroom. Real-life examples of boarding houses include co-living spaces for young city workers, students or people who travel for work for long periods.

• All tenants have their own tenancy agreement with the landlord to rent a single room.
• There are no fixed-term tenancies in a boarding house, with agreements intended to last 28 days or more.
• Boarding house landlords need to stay up-to-date with changes to tenancy law and comply with the healthy homes standards.
• A boarding house landlord can make house rules, which must not breach the Residential Tenancies Act or any other law.

Unlawful residential premises

Unlawful residential premises are properties that cannot lawfully be lived in. In these properties, landlord obligations haven’t been met. Real-life examples of unlawful residential premises would include a garage, a property in a commercial premise such as office buildings, or a minor dwelling, such as a granny flat.

• If a property has been deemed unsafe and unsanitary by the local authority, it is considered unlawful. Granny flats can be upheld under the RTA as long as the flat has a building code of compliance and meets the rules and requirements under the RTA.
• Tenants can give their landlord two days’ notice to end a tenancy if the premises was unlawful at the start of the tenancy and/or is still unlawful.
• The Tenancy Tribunal has full jurisdiction over unlawful residential premises cases.

Who IS NOT protected under the Residential Tenancies Act?

Some types of living arrangements aren’t covered by the Residential Tenancies Act. For example, the Act doesn’t cover flatmate situations, holiday homes and commercial tenancies, all of which we will talk about extensively below.

Section 5 of the Residential Tenancies Act explains all the different situations that it doesn’t apply to.

According to Residential Tenancies Act regulations, the following situations are not covered:

Flatmates

Flatmates are people who live in the property with the tenant but are not named on the tenancy agreement. In real life, this could include:

• A homeowner who finds someone to live in their house with them and rents a room to them.
• A few people who rent a house together but some of them don’t sign the tenancy agreement.

The Act is clear in that it “doesn’t cover flatmates”. In the above situations, you would have to look into tenants’ rights and contract into the Act if you wanted to make your arrangement official.

Boarders

Boarders are “people who live with the owner of the house”. Real-life examples of this would include:

• A homeowner hosting a student from abroad as part of an exchange.
• A homeowner living with a new partner but not sharing the home on paper.

Boarders have a relationship with a homeowner that ranges beyond monetary gain. For this reason, the Residential Tenancies Act landlord obligations don’t really apply here.

Minors

Minors are people under 18 years. Real-life examples include:

• Young students.
• A young, emancipated couple.

The Act says, “Landlords may not be able to enforce the terms of the tenancy agreement against a minor”. This means you may have a hard time as a landlord if you need to enforce the tenancy agreement against a minor, as you will need to apply to the Tenancy Tribunal and have to brush up on your landlords’ rights.

Landlord’s family members

Situations, where the tenants are family members of the owner/landlord, aren’t regulated by the Act. The Act does not cover arrangements “where the premises, not being a boarding house, continue to be used, during the tenancy, principally as a place of residence by the landlord or the owner of the premises or by any member of the landlord’s or owner’s family”. Real-life examples of this would include:

• A cousin living in the home freely.
• A mother-in-law living with a couple in the spare room of their home.

These are family relationships where rent would not be charged, so landlords’ responsibilities aren’t really an issue.

Student accommodation

This is accommodation officially used to house students. This includes:

• University student dorms.
• Student hostels.

According to the Act, “In these situations, the accommodation provider must have house rules. The accommodation provider must make sure the student tenants are aware of and have access to copies of the house rules”. It is worth noting that these rules will differ from regular tenant rights NZ.

Holiday homes

Holiday homes are the premises that are let for the tenant’s holiday purposes. This could be:

• A beach home visited by the owner in the summer months.
• A country home that they exchange with friends in holiday swaps.

The Act says that “If the homeowner wants to let their home to someone who wants it for a lengthy sabbatical or holiday, they could elect to ‘contract into’ the Residential Tenancies Act to avoid any doubt about whether the Act applies to their arrangement”.

Hotels and motels

These are the premises intended to provide temporary or transient accommodation. Real-life examples include:

• A five-star hotel.
• A bed and breakfast or Airbnb.

The Act says hotels and motels are “accommodation that is ordinarily provided for periods of less than 28 days at a time”. This means that a stay in such a place would not fall under the Act rules, and one would not abide by regular tenants’ rights.

Hospitals

According to the Act, a hospital “or other institution for the care of sick, disabled, or aged persons” does not fall under its rules. Residential Act regulations, therefore, would not apply to:

• Extended patient stays at hospitals.
• Stays in clinics for multi-day treatments.

If you are a long-term in-patient, there will be specific hospital rules that are expected to be followed.

Rest homes

These are the premises for people with significant difficulties coping with the activities of daily living. Some examples include:

• Residents in institutions for disabilities who need special care.
• Residents of homes for the elderly who need daily nurse attention.

The “Act doesn’t cover rest homes”, which are regulated under separate legislation by the Ministry of Health.

Commercial tenancies

This is a type of tenancy “where the premises are commercial premises”. Examples of situations where the Act would not apply are:

• Office buildings.
• A shop with a back room.

In these cases, there would be different avenues you would have to pursue to ensure that staying in the premises, rather than just working there, is legal.

Know your rights!

Knowing your tenant and landlord rights ensures that you always know what to do and what avenue to turn to when things get complicated. Being aware of your rights and responsibilities can make all the difference.

While it may be time-consuming to read the Residential Tenancies Act and get to know it thoroughly, there is help at hand. We hope our summary has answered your questions about what the Residential Tenancies Act is, but if you want to know more about landlord or tenant responsibilities, contact CGPM. Our professional team of Property Managers are well known as the best in Auckland!

The post A guide to the Residential Tenancies Act: Who is protected? appeared first on Clarke Group Property Management | Auckland Property Management.

Are you confused about the differences of periodic tenancy vs fixed term? You’re not the only one. The differences between a fixed term and a periodic tenancy are many, and they often cause questions both with landlords and tenants. In this article, we will explain how exactly these types of tenancies are different. Read on for answers to the most common questions related to the topic. Specifically, we will answer:

• What are the tenancy trends in Auckland’s real-estate market?
• What does periodic tenancy mean for landlords and tenants?
• What does fixed term tenancy mean for landlords and tenants?
• How can you ensure you choose the right type of tenancy for you?

Whichever type of tenancy you choose, watch this helpful video to make sure that you act in compliance with the law:

Fixed vs periodic tenancy: statistics

New Zealand’s and, in particular, Auckland’s real estate landscape has changed considerably over the past decade. Some statistics that are evidence of this, focusing on the proportion of periodic tenancy vs fixed term, are the following:

• Even though fixed term vs periodic tenancy has been traditionally less popular with renters, this is changing. Ten years ago, fixed term tenancies accounted for only 35% of tenancies in Auckland, increasing to 51% five years ago.
• Data shows that tenancy duration remains more or less steady, with the average tenancy duration in Auckland decreasing only slightly – something that could be explained by the fact that a high proportion of inner-city renters are students who are planning to move in the future based on job opportunities.
• The central suburbs of Auckland have the longest average tenancies, while suburbs with average tenancies of over three years include Balmoral, Lynfield, St Johns, Paerata, Mangere Bridge, Devonport and Green Bay.

Fixed term tenancy vs periodic tenancy: understanding the difference

It is very important for both landlords and tenants to know about the differences between a periodic tenancy and a fixed-term tenancy for many reasons. These include:

• The type of tenancy you have will affect what your rights and obligations are as a tenant or landlord. For example, if you want to terminate a tenancy, you will find that the conditions are very different for periodic and fixed-term tenancies.
• Knowing the differences between a periodic tenancy and a fixed-term tenancy allows you to choose the one that suits you best. For example, if you intend on staying in one location for a long time, you may want to discuss the ideal length of tenancy for you with your landlord as there is no maximum.
• Being aware of the differences between what is a periodic tenancy and what is a fixed-term one will also allow you to budget properly. Knowing exactly how much you will be spending as a tenant or earning as a landlord can help ensure your financial security. As a landlord, you will need to be especially aware of the different rules for increasing rent during periodic and fixed-term tenancies.

Periodic tenancy

What is a periodic tenancy?

A periodic tenancy definition would be a rental agreement with no end date. This means that it continues until written notice is given to end it by either the tenant or the landlord. In other words, a tenancy with no fixed duration is a periodic tenancy.

Is a periodic tenancy good? Who is it suitable for?

Periodic tenancies are great for people with regularly changing life circumstances, as they offer flexibility. If you don’t have a family and are thinking of relocating based on job prospects but want to keep a window of possibility open, a periodic tenancy is most likely suitable for you.

Is there any special periodic tenancy law in New Zealand?

The main official document regulating all periodic tenancy related issues is the Residential Tenancies Act.

The laws that define periodic tenancy in New Zealand are often updated. You can stay up-to-date with periodic tenancy laws by visiting this website.

What is a statutory periodic tenancy?

A statutory periodic tenancy occurs when a fixed term tenancy ends and the tenant continues to stay at the property on a rolling, periodic basis without renewing their contract.

What is a year-to-year periodic tenancy (yearly periodic tenancy)?

Periodic tenancies must have a certain maximum duration, which is often a year. A yearly periodic tenancy is a tenancy that rolls from one year to the next.

What is a periodic tenancy agreement?

A periodic tenancy agreement is a written contract between a landlord and a tenant that sets out everything that a landlord and a tenant have agreed to about the tenancy.

Where can I find a periodic tenancy agreement template free?

For free periodic tenancy agreement templates, head to the Tenancy Services website.

How long is the notice period for a periodic tenancy?

Tenants must give landlords 28 days’ written notice in order to end a periodic tenancy. The length of time for giving notice to tenants as a landlord depends on their reasons for ending the tenancy.

Where can I find a periodic tenancy notice template?

You can find a free periodic tenancy termination notice template online on the Tenancy Services website.

The link also contains a periodic tenancy notice by tenant form.

When is terminating a periodic tenancy possible?

Terminating a periodic tenancy is possible at any time after the tenancy agreement has been signed by both the tenant and the landlord.

Where can I download a sample periodic tenancy rent increase notice?

If you are a landlord who wants to increase periodic tenancy rent, you must inform your tenants in writing in advance. You can download a sample rent increase notice, as well as any periodic tenancy notice NZ, here.

Where can I download a sample periodic tenancy eviction notice?

If you find yourself in the unfortunate position of having to evict your tenants for some reason, you will have to inform them in writing as well.

You can download a sample eviction notice for free.

Fixed-term tenancy

What is a fixed term tenancy?

To define fixed term tenancy, one would say it is a rental agreement that lasts for a set amount of time, from a few months to a year or more.

Is a fixed term tenancy good? Who is it suitable for?

A fixed-term tenancy is great for individuals seeking long-term security. Fixed-term tenancies can be suitable for families who are set on a location for a long time due to work and education commitments. Many landlords also have a preference for fixed-term tenancies, as they provide a guaranteed long-term income.

What is a fixed term tenancy notice?

A fixed-term tenancy notice is a written notice given once the term ends in order for the tenancy to not become periodic automatically.

How long is the fixed term tenancy notice period?

Tenants need to give their landlord notice in writing at least 21 days before the term ends.

Is ending fixed term tenancy early possible?

You cannot end fixed-term tenancies early by simply handing in a notice. Fixed-term tenancies can only be changed if a landlord and all their tenants agree.

Is getting out of a fixed term tenancy agreement legal?

If the landlord and all tenants discuss and agree on early termination of a fixed-term tenancy, then this is legal. This agreement should be in writing and tenants should keep in mind that the landlord may charge a fee for ending the fixed term early.

Where can I find a fixed term tenancy agreement template?

To find a fixed term residential tenancy agreement template online, head here.

Where can I download a sample fixed term tenancy rent increase notice?

If you want to increase rent as a landlord, you will need to inform your tenants in advance by giving them a written notice. You can download a sample fixed term tenancy form notice online.

Is a 5-year fixed term tenancy possible?

As there is no fixed term tenancy NZ maximum length, a 5-year tenancy is possible.

What is short fixed-term tenancy?

Just like the fixed term tenancy definition, short fixed-term tenancy is also clear in its meaning. A short fixed-term tenancy is a tenancy the fixed-term of which is 90 days or less. Unlike a regular fixed-term tenancy, it does not automatically become periodic when the term ends.

Boarding houses

What is a boarding house?

A boarding house is a residence intended to be occupied by at least six tenants who rent a single room and share the rest of the facilities, like the kitchen and bathroom. Boarding houses must comply with local council requirements, as well as healthy homes standards.

What is a boarding house tenancy?

A boarding house tenancy involves all tenants signing their individual tenancy agreement with the landlord. Boarding house tenancy agreements normally last 28 days or more and there are specific rules and regulations that must be followed by tenants and landlords.

Service tenancy

What is a service tenancy?

A service tenancy is a tenancy where accommodation is provided for workers by their employer for the duration of their employment contract.

Most of the standard rules that apply to regular tenancies apply to service tenancies as well, save for a few differences, like for instance that rent can be deducted from a tenant’s wages upon agreement.

Make your choice!

Different tenancies mean different rules, rights, and responsibilities for both landlords and tenants. This is why it is important to know what is a fixed term tenancy, and what is a periodic one, and what kind of tenancy suits your individual needs before signing a tenancy agreement.

If you are a landlord looking for steady long-term income, you might benefit from a fixed-term tenancy. On the other hand, if you are looking to rent an apartment for only a couple of months before moving, you’re probably better off with a short term fixed tenancy agreement. Whichever you choose, you will need to be well-informed about the rules for terminating your contract, rent increases, evictions, and everything else that comes with renting so that you know exactly what you’re getting into.

This is where CGPM comes in. For all your questions on different types of tenancies, rights and responsibilities as a landlord and tenant and more, contact CGPM. Our Auckland property management professionals will be able to guide you through the process of renting in Auckland.

The post Fixed term vs periodic tenancy: Answers to landlords’ eternal questions appeared first on Clarke Group Property Management | Auckland Property Management.

Are you finding yourself overwhelmed by the advice for first time renters out there? It’s true that renting a home for the first time may cause many questions – not only for tenants but also for landlords. We are here to answer all your questions with the ultimate first time renter checklist!

Keep reading to learn:

• what your rights and responsibilities are as a tenant or landlord;
• what to keep in mind when moving into or renting a property for the first time;
• the best tips for first time landlords and tenants.

Landlord’s responsibilities

Being a landlord for the first time means you will have to get informed about your rights and obligations. Landlords who are renting out property for the first time will need to be aware of their responsibilities under the Residential Tenancies Act 1986. Landlords are legally required to:

• Ensure their property meets building, health, and safety standards.
• Hand over the property to the tenant in decent condition. They must add carrying out all repairs and maintenance to their new landlord checklist well before a tenant moves in.
• Allow tenants to peacefully enjoy the property without interruptions.
• Inform tenants in advance if they intend to sell the property.
• Be represented by an agent if they spend more than 21 consecutive days outside of New Zealand.
• Declare income earned from renting the property.
• Allow tenants’ requests to make minor changes to their rental property.

Tenant’s responsibilities

As a first time home renter, you will have to be aware of your responsibilities prior to renting a house. Your first time renters’ guide should include your responsibilities, which are:

• Paying rent on time.
• Keeping the property in good condition.
• Immediately informing the landlord about any damage or repairs needed.
• Paying for electricity, gas and internet.
• Leaving the property clean, tidy, and rubbish-free, as well as returning all keys to the landlord.
• Getting the landlord’s written consent in order to make minor alterations to the property.

Mutual responsibilities

It is the responsibility of both landlords and tenants to ensure the tenancy agreement is in writing and they have records of it. Landlords and tenants should always be keeping their contact details up-to-date, and neither party is allowed to change the locks of the property without the other’s permission.

Landlord’s checklist

To be a successful first time landlord, you must tick off the following items off your checklist prior to putting your house on the market:

• Carry out necessary maintenance and repairs.
• Ensure your property is lawful for residential use, complying with building health and safety regulations. The healthy homes standards cover heating, insulation, ventilation, moisture ingress and drainage, and draught stopping.
• Get all required statements. Landlords must provide statements for all tenants that they comply with the healthy homes standards, as well as an insulation and insurance statement.
• Add checking that smoke alarms are correctly installed and working properly to your first time landlord checklist.
• Advertise the property, as you won’t be able to accept bids without an advert displaying the rental amount.
• Collect the contacts you’ll need for repairs, the local council or real estate agents that can solve your questions. This is one of the most useful new landlord tips that will save you lots of time!
• Screen your tenants to ensure they are trustworthy and will take care of the property.
• Record the condition of the property during the property inspection by taking photos as a last step of your first time landlord guide.

Tenant’s checklist

If it’s your first time renting, there is a checklist for you, too! Before you take the big step of moving out of your family’s home, you will need to consider a few things carefully. Use the points below as your first time renting guide:

• Tenancy duration: You should be aware of the differences between periodic and fixed term tenancies. Periodic tenancies have no end date, lasting until either the landlord or tenant decides to end them. Fixed term tenancies last until a specific date mentioned in a tenancy agreement. Think carefully about how long you want to commit to a specific property for.
• Rental price: Choose a property you can comfortably pay for and consider applying for financial help if you are struggling to cover your rent.
• Property location: Decide what type of area you would like to live in and find out what the future planned developments there are.
• Collect necessary documentation: This includes your ID and references, among other statements.
• Check that the property is safe: It is important to guarantee that it has working smoke alarms and meets all healthy homes standards. People renting a house out for the first time often forget to do this.
• Get statements from landlord: Ensure that your landlord can provide you with all necessary statements, including one regarding the property’s insulation and information about the property’s insurance policy.
• Finally, to complete your renting a house for the first time checklist, discuss house rules with the landlord: For example, are there any rules about smoking, pets or specifics about rubbish disposal and recycling?

Mutual checklist

At the end of the day, tenants and landlords must cooperate in order to achieve a smooth tenancy on both ends. Their mutual responsibilities include the following:

• Reading and having a thorough understanding of the tenancy agreement before signing it.
• Agreeing on the inventory of items provided with the property together and taking photos of the condition of the house on the move-in day.
• Agreeing on the bond amount, which is normally four weeks’ rent.
• Taking meter readings together in order to avoid possible future disputes.
• Ensuring their contact details are up-to-date, as well as exchanging emergency contact numbers.
• Keeping detailed records of anything relating to the rental property. One of the best reminders/tips for new landlords is that they are required to save copies of documentation for twelve months after the end of a tenancy.

FAQ

We’ve gathered first time renters’ most common questions. You can read our expert answers to them below. Also, watch this amazing video:

How to move out for the first time?

The first thing you have to do before moving out of your family home is to get your finances in order. If you have a steady income or enough savings, you will be ready to start looking for a suitable place to live. At this point, you will probably have many first time renter questions, so make sure to do a lot of research before renting a house.

How much does it cost to move out for the first time?

There is no one right answer to how much it costs to move out for the first time. Ideally, you want to have a decent amount of savings before you take this big step.

Saving three to four months’ living costs is a good starting point for those considering moving into their first rental home. Even if you have a steady income, you must be prepared for unexpected expenses associated with living on your own and taking care of a property. Depending on where you live, a three-month safety net could range anywhere from $3,000 to over $5,000.

Other than rent, you will have to factor in paying for utilities, food, transport and recreation. When renting your first house, you will also likely find that you need to put aside an amount for unpredictable costs that may arise from being responsible for the daily maintenance of a property.

What do I need to rent a house for the first time?

After you have set the budget for renting your first house, you will need to consider its location. Go through your “new tenant checklist” and find out about the area’s access to transport, amenities, safety, future developments and consider whether it suits your lifestyle.

When you find an advert for a property you are interested in, you will be able to fill out a rental application and you will be asked for some documentation, such as your ID and references.

What to do first when moving into a new home?

While your first instinct when you step into your rental home if you’re new to renting may be to celebrate, the first thing you should actually do is make sure that the utilities are set up and, if not, connect them.

Do a quick walkthrough to ensure everything is as it was during the inventory check with your landlord. If you have a child or pet, your next step should be to ensure that the property is child- and/or pet-proof.

What to bring to someone’s house for the first time?

If it’s the first time you’re visiting someone’s home, it is a nice, customary gesture to bring a small gift. This will be especially meaningful to someone who is renting a house for the first time. Your gift does not have to be expensive and, ideally, it should be something that contributes to their new home. Some ideas of gifts that are always appreciated include:

• tea towels
• wine glasses
• candles
• vases
• potted plants

When do you pay first month rent?

Normally, you pay each month’s rent in advance, at the beginning of that month. A landlord can ask for 1 or 2 weeks’ rent in advance depending on whether the tenant will pay rent weekly or fortnightly.

What does first and last month’s rent mean?

First month’s rent refers to paying rent for the first month of your tenancy in advance, a practice meant as a security measure. Similarly, last month’s rent refers to the payment of one month’s rent, intended to cover the end of the lease.

Enjoy your first home!

Renting for the first time can be stressful for both renters and landlords. There is a lot to know so as to ensure you make the best decisions.

To adequately prepare for renting a home for the first time, whether you are a landlord or a tenant, you need to know what your rights and responsibilities are. To ensure a smooth tenancy, before moving into a new property, make sure you have downloaded our full-proof checklist to help you navigate the first time rental experience.

If you have any questions or need some guidance during this process, contact CGPM. CGPM care for your needs and are guaranteed to find you the exact property you are looking for and provide you with all the help you need when renting out a house for the first time.

The post The ultimate checklist for first time renters appeared first on Clarke Group Property Management | Auckland Property Management.

Selling a property is always stressful, and even more so if it is a rental one. What if there are tenants living in your property? Are there any regulations you need to consider for the sale of your rental property? We will enlist landlords’ and tenants’ rights and responsibilities and analyse the three most common scenarios.

Few landlords and tenants know their rights and responsibilities in such a situation. But we are here to help! In this article, we will talk about what happens when you sell a tenanted rental property. Read on to learn:

• how to inform your tenants that you are selling a rental property;
• what arrangements you need to make with your current tenants to sell the property;
• the things you should remember when selling your property.

Reasons

There are many reasons why a landlord may want to sell their rental property, even if it brings them considerable passive income. The three most common reasons for selling a rental property:

• Being a landlord has become too much work: Sometimes people find that being a landlord involves more work than they had hoped, from dealing with problematic tenants to constantly being on call to resolve issues with the property and not to mention an array of legal processes to follow.
• Capital gain: The property is now worth more than when it was purchased. If the area a landlord has bought in has developed and is thriving, their property’s value will have significantly increased, and they may want to make a profit.
• Experiencing a major life change: A divorce, death in the family, accident or another major life event can often make it necessary to shift one’s priorities from taking care of rental properties to other things.

Whatever the reason that makes you want to sell your rental property, you should get informed about the process beforehand. To go deeper into details, watch this helpful video:

Informing the tenant

If you are set on selling a rental property with tenants on a lease, you may be wondering how to deal with the situation in a clever and delicate manner.

A notice to sell your rental property will have to be sent to your tenants. It is necessary to inform them in advance because:

• They will need time to make alternative living arrangements.
• They will need to allow real estate agents and potential buyers into their home.
• You will need some time to settle any pending issues, i.e. payments and refunds.

The tenant should be informed in writing about the sale, according to the law. This way dates cannot be disputed in the future.

Landlords should make themselves available for a follow-up face-to-face discussion with their tenants to discuss questions they have and details about accessing the property for any preparations that need to take place for the sale. This way your tenants will never find themselves in a position of having to Google “my landlord wants to sell the property I’m renting” for answers!

To find free termination notice templates to use, head here.

Letting potential buyers inside

During the process of the sale of residential rental property, various individuals will need access to it. From cleaners and construction professionals to real estate agents with potential buyers, your tenants will have to allow many people inside. Even though as a landlord you may want to move as quickly as possible to sell your rental property, your tenants may not be as positively disposed to give access to their home.

5 things landlords ideally want so they can show the property to potential buyers are:

• Having access to the rental property for sale at all times.
• Asking tenants to show the property on their behalf.
• Allowing potential buyers in for however long they want.
• Letting potential buyers in all areas of the house.
• Keeping the property clean and tidy.

5 conditions that tenants can set for property access are:

• Refuse to allow photographs of their personal possessions in photos that relate to the sale of the rental home.
• Ask for a temporary rent reduction in return for allowing open homes, which is up to the landlord’s discretion to grant.
• Limit access to certain days and times of the week for viewings.
• Refuse open homes and auctions at the property.
• To be present at the home at all times, including during open homes.

3 property sale scenarios

Here, we will answer frequently asked questions about the most common scenarios when selling a property so that you can expertly navigate them:

Scenario 1: Selling a tenanted property where the buyer will take over as the new landlord.

Is the new owner going to continue renting out the property to the same tenant?

Yes. If the tenant’s lease has not expired, the new buyer can take over as the landlord for existing tenants.

Is the monthly rent going to change?

No, the conditions of the tenancy are not affected in this scenario.

What happens to the bond?

If there is a bond, the details on the bond record held by Tenancy Services must be updated from previous landlord details to the new landlord details.

Which law needs to be considered?

The Residential Tenancies Act.

Remember: In this case, the landlord and the new buyer must not forget to update the details on the tenancy agreement. The new landlord should also not forget to exchange contact information with the tenants.

Scenario 2: Selling a tenanted property where the buyer wants the property to be vacant.

Is the new owner going to continue renting out the property to the same tenant?

No, the property should be vacant when the sale of rental settles.

Is the weekly rent going to change?

No.

What happens to the bond?

If there is a bond, this will be returned to the tenant, provided there is no damage to the property, when the lease ends.

Which law needs to be considered?

Section 51(2) of the Residential Tenancies Act 1986.

Remember: If the current tenants are on a periodic tenancy, the landlord must give at least 90 days’ written notice to end the tenancy. If they are on a fixed-term tenancy, they must agree in writing for it to be ended early.

Scenario 3: Selling a property with vacant possession already decided.

Is the new owner going to continue renting out the property to the same tenant?

No.

Is the monthly rent going to change?

No.

What happens to the bond?

If there is a bond, this will be returned to the tenant, provided there is no damage to the property, when the lease ends.

Which law needs to be considered?

Section 51(2) of the Residential Tenancies Act 1986.

Remember: If the current tenants are on a periodic tenancy, the landlord must give at least 90 days’ written notice to end the tenancy. If the current tenants are on a fixed-term tenancy, the landlord cannot put the property on the market for sale until the tenancy has ended. After the tenancy has ended, they are required to put the property on the market within 90 days.

Mortgagee sale

A mortgagee sale is a property sale that takes place when a person can’t pay back the money they owe to a bank. Essentially, landlords may have to sell their rental property to pay off a mortgage. The bank repossesses and sells their property to get back the money it’s owed, becoming landlord to the tenants in the process.

What a mortgagee sale means for tenants

A tenant’s life will not really change after the bank has become the landlord. While the tenant will be informed of the sale and new ownership, other than the fact the tenant will pay their rent to the bank, everything will remain the same. Banks have the same rights and responsibilities as any landlord.

What happens to the bond in case of a mortgagee sale?

The bond stays with Tenancy Services, and the bank replaces the landlord on the bond record. If the previous landlord has been refunded the bond before the bank takes over, the bank will not have a bond to claim if obligations are breached by tenants.

Fixed-term tenancies and special rights during a mortgagee sale

In fixed-term tenancy cases, the bank and the tenant have the right to give notice to end the tenancy as if it were periodic.

FAQ

Should I sell or rent my house?

To rent or sell your home? That is the question! Deciding whether to sell or rent your house is a big decision. Renting your property can bring in considerable passive income not to mention the capital gain that can be made each year especially with Auckland property prices on the rise. But if you want a large sum of cash now then selling may be the right answer for you. Selling, however, is an involved process, which will require you to find a lawyer and a real estate agent, among other things.

When to sell rental property in 2021?

You can sell your rental property as soon as you decide to, as long as you keep in mind that some regulations have changed. For example, for properties acquired on or after 27 March 2021 that are not used as your main home for twelve months or more, you will be required to pay income tax on a proportion of the profit made through the property increasing in value.

Make your choice!

• There are many different reasons why an individual may decide to sell a rental property even if it brings them income.
• You can sell your property even if tenants are still living in it, as long as you inform them in advance and in writing. And if they are on a fixed-term agreement then you will need to get them to agree to break the agreement early.
• It is important to respect your tenants’ rights and discuss convenient times for them to let potential buyers into their home.
• If a property is sold as a mortgagee sale, then the bank becomes the landlord, but this does not change the terms and conditions for current tenants.

If you are thinking about selling a rental property with a tenant, consult with CGPM. The company’s expert Property Managers will make the process hassle-free for you while ensuring you maximise your profits!

The post Selling a rental property with tenants on a lease: 3 scenarios to follow appeared first on Clarke Group Property Management | Auckland Property Management.

Are you struggling to decide between buying and renting property? Getting flustered Googling “homes for rent Auckland”? Indeed, choosing between buying and renting property is often a challenging task. Each option has different types of advantages. And we are here to provide an expert opinion on whether you should buy or rent Auckland homes. In this article, you will learn:

• the benefits of renting vs. owning property
• the most important things to consider before renting or buying property
• how you should go about finding the ideal NZ property to buy or Auckland flats for rent

Statistics

There are estimated to be over 1,787,900 households in NZ and a homeownership rate of 65.6%. House prices have been on the rise in recent years and, so, homeownership rates are mostly dropping in every region.

This is particularly true of Auckland, which is seeing the largest decline in homeownership rates. According to statistics, homeownership in Auckland has dropped from 72.7% in 1991 to 59.4% in 2018.

This means that a lot of people in the country are renting their accommodation. Based on the 2018 census, 31.9% of households, i.e. 1.4 million people across the country are living in rented homes.

The number of people who rent homes in Auckland is 604,100, i.e. 34% of the city’s inhabitants.

To rent or not to rent? That is the question!

SPACE

1. Organizing your personal space: Should you buy or rent a house in Auckland?

Own property: You can easily change chattels and fixtures.

In your own property, you will never have to deal with disputes about chattels and fixtures.

Chattels are items of personal property that were never intended to be fixed to the house and can be removed without causing damage to the property.

Fixtures, on the other hand, are things permanently attached to the house or to the land.

Chattels and fixtures are a common source of argument between landlords and tenants and, as an owner, you will never have to deal with that!

Rented property: No fixtures.

If you have chosen an Auckland home for rent to live in, you cannot renovate, alter or add fixtures, e.g. in garden sheds, pools etc. These are the responsibility of the landlord, who is also responsible for any costs associated with their repair and maintenance – which is a plus, in this situation.

To get a better understanding of the differences between chattels and fixtures, watch this informative video:

2. Knowledge of the district: Which area offers the best homes for rent in Auckland?

Own property: You get accustomed to your own district.

Buying your own property means that you have a permanent address and allows you to truly get to know your neighbourhood. This is important for creating a sense of stability.

Rented property: Every time you move, you start from scratch.

Starting from scratch is not easy, and homes in Auckland for rent can be expensive. Some people are overwhelmed by the idea of starting over, while others feel excited by it. If you’re the latter kind of person, you are guaranteed to experience diversity in Auckland’s different districts. Auckland straddles two coasts and you can find everything there – from bustling city life to calm white-sand beaches and rugged nature to the west.

3. Diversity: Are properties to rent in Auckland better for those who prefer diversity?

Own property: Lack of diversity.

Some would argue that when you always stay in the same place in a city, be it a house or an apartment, you could get bored. While it’s true that owning a house doesn’t allow for diversity, if you are the kind of person that thrives on stability, this could be the right choice for you.

Rented property: You can change your environment as often as you like.

Tired of your home interior? If you are renting, all you would have to do in that situation is wait for your lease to end, and then you would be free to move along to another more inspiring location.

4. Moving: How convenient is it to switch between Auckland rental homes?

Own property: Moving from district to district within Auckland is not easy.

You cannot just pack up a house like a suitcase and move out quickly when you get tired of your house. It takes time to sell your property and buy another one or find tenants for your property and rent a home somewhere else.

Rented property: You can easily move to another Auckland district, city or even country whenever you like.

If you are simply a tenant that wants to leave their accommodation, you will find that it is rather easy. Sometimes understanding landlords will even allow you to move out before the lease ends if they have found a new tenant!

5. Choice: Rent a home in Auckland that is exactly like you imagined.

Own property: If you’ve inherited your property, you may have to live in a home you don’t actually like.

If you inherit a property, it usually means you won’t get an opportunity to create your dream house. Inherited properties often need a lot of renovations in order to appeal to their new occupants!

Rented property: You can choose the best variant among dozens of Auckland homes.

Renting allows you to find a property that suits your taste perfectly. With so many housing options available in Auckland (Google “homes for rent Auckland” and see for yourself!), if you don’t like an apartment, you just move on to the next one… just like that!

6. Renovation: Who is responsible for renovating an Auckland property for rent?

Own property: Needs renovation once in every few years.

Maintaining a house does not come cheap. If you’re the owner of a property, renovation is your financial responsibility.

Rented property: Renovation is the landlord’s responsibility.

While tenants sometimes have issues convincing landlords to get on with required maintenance and repair work, they at least do not have to incur the costs of property renovation – a big advantage for renting a place.

7. Consumerism: Does living in Auckland houses for rent promote consumerism?

Own property: You tend to buy tons of things to make your home cosy.

This is often an unnecessary cost, and the results can be cluttered and chaotic.

Rented property: Remembering that you will be moving out one day prevents you from overspending.

When you rent a house, you are unlikely to buy tons of unnecessary things that will be hard to pack when moving elsewhere. This saves you money and space!

PEOPLE AND ANIMALS

8. Kids: Are homes for rent in Auckland New Zealand kid-friendly?

Own property: No repercussions for damages caused by kids.

Parents will know that children can often get defiant and destroy things. Accidents can happen with kids around in a house, but at least if it’s your own property, you don’t have to compensate anybody else for damages.

Rented property: Many Auckland landlords disagree to have tenants with kids.

Many landlords show preference to tenants without kids, for the reason that children can unwillingly cause damages to property. Yet, it is unlawful to discriminate against prospective tenants with children under the age of 18.

9. Education: Living in Auckland homes for rent, can you guarantee a stable education for your kids?

Own property: Your kids can go to the same kindergarten/school/university.

Owning your home means your children will be able to attend the same school throughout their education, which is really important for their growth and stability.

Rented property: Disruptions to your kids’ education can occur when a tenancy comes to an end.

If your landlord ends your tenancy, you will have to look for a property in the same district so that your children can keep attending the same school, which can be a difficult task sometimes.

10. Age matters: Do you want to be looking for cheap houses for rent in Auckland when you’re older?

Own property: Elderly people get attached to their homes.

It is comforting for people to grow old in a house that is their own and where they have spent many years of their lives and made many memories.

Rented property: It’s difficult for an elderly person to adapt to new places.

With age, it becomes significantly harder to pack up your belongings and move to new places, setting up a home from scratch. It can take a toll mentally and physically on elders.

11. Guests and fellow residents: If you live in flats to rent in Auckland, can you have guests?

Own property: You can invite anyone and for any period of time.

Owning your own house means you don’t need to inform anyone about who you are having over and when. If you want to let relatives stay over for an extended period of time, that is only your own business!

Rented property: You need landlord permission if you want to invite a guest.

You can only invite guests over to stay, especially for a long period of time, with landlord permission according to the NZ Tenancy Services rules. Most landlords allow guests to stay over no more than 10-14 days in a six-month period.

12. Human relations: Who do you have to interact with when living in Auckland city homes for rent?

Own property: You communicate only with your family and friends.

Living in your own property, you get to have control over who you communicate with and who you let in. This can be a nice luxury if you’re a private person.

Rented property: Landlord-tenants’ relationships are often difficult.

In a rented property, you will always have to deal with your landlord. If you get lucky, communication with them will be easy, but landlord-tenants’ relationships are notoriously difficult and you may have to prepare yourself for some inevitable conflicts.

13. Pets: Do houses to rent in Auckland allow pets?

Own property: No repercussions if pets damage something in your own property.

If your pet causes damages to your property, you may have to replace an item or two, but it’s no big deal as you are only holding yourself liable and will not be having to compensate a landlord.

Rented property: Many Auckland landlords disagree with tenants having pets.

Since pets are known for scratching surfaces and flooring and causing damage to property, many landlords show preference for tenants without pets. Homeowners insurance does not always cover pet damage, so they are likely to avoid tenants with pets if they do not have the right coverage. When looking for a place online, make sure to add “pets allowed” to your “Auckland rent a house” search to facilitate the process.

MONEY

14. Bond vs down payment: Should you save for a down payment or pay the bond on a house for rent in Auckland?

Own property: Making a down payment

In New Zealand, you generally need a 20% deposit to get a mortgage. An Auckland homebuyer needs to scrape together $159800, while in Dunedin and Christchurch they would need about $90,000.

Rented property: Making a bond payment

To live in a rental home in Auckland New Zealand, the maximum bond you will be required to pay is an amount equal to 4 weeks’ rent. When the tenancy ends, tenants are refunded the amount after a property inspection.

15. Payments: What is the average rent in Auckland New Zealand?

Own property: No need to pay rent.

While you may have to take out a loan to buy your property, you will never have to pay rent! Loan payments don’t increase and, in fact, they can even decrease in case of refinancing your mortgage, which involves your bank or lender paying off your old mortgage with a new one.

Rented property: You need to pay rent.

Unfortunately, rent is high around the country and is likely to increase. The average rent price in Auckland is around $600 a week. The national median weekly rent for a small house (1 to 2 bedrooms) was estimated at NZ$390 a week, and NZ$525 for 2 to 4 bedrooms.

So, which is less expensive – paying rent or paying loan – and why? Well, that depends on your specific situation. Buying a home is an enormous investment, so it is vital that you do not rush into your decision.

16. Taxes: Is it better to buy a house or to find a house to rent in Auckland?

Own property: You need to pay property taxes.

If you own a property, you will have to pay local property taxes. These are levied by local authorities and based on the rateable value of a property. The annual cost for an average family house is between NZ$1,000 and NZ$2,000.

Rented property: You don’t need to pay property taxes.

One of the greatest advantages of renting a house is that you do not have to deal with extra bills! You can rest easy knowing that property taxes are your landlord’s responsibility.

Rent a home in Auckland!

New Zealand, and specifically Auckland, is a great place to live, as it offers so much diversity and a fantastic quality of life. Depending on your circumstances and what you are looking for, you can either buy a house in the country or choose from one of the many houses for rent in Auckland New Zealand. We have explicitly outlined the benefits of renting and the benefits of buying so that you can weigh them up for yourself and make the right choice.

If you are looking for our expert opinion… We recommend first trying renting properties and exploring different flats for rent in Auckland before committing to one single property or one single location where you’re going to buy. This will help you get a feel for what you want before you officially become a homeowner.

Use CGPM to help you find the ideal property, no matter your situation. Our expert team has the knowledge to get you the best deal out there – whether you’re looking for an Auckland house for rent or to buy your dream home!

The post One own home or numerous houses for rent? Auckland experts’ opinion appeared first on Clarke Group Property Management | Auckland Property Management.

Deciding where the best place to live in New Zealand is remains difficult for many immigrants and locals. It is a country that offers abundant choices! Life in each city or town has its own benefits. Here, we promise to provide an honest review of NZ’s top cities and towns to live in. Specifically, we will talk about:

• what you should consider when choosing a place to live in;
• our top choices for the best places to live in New Zealand;
• how to find the best place to rent in Auckland.

New Zealand quotes

While there aren’t any traditional sayings about life in New Zealand, some famous personalities have been quoted as saying the following about it:

• “New Zealand <…> is a unique place because it is so far away from the rest of the world. There is a sense of isolation and also being protected.” (Elijah Wood, an American actor)
• “I feel that New Zealand is my second home.” (Luke Evans, a Welsh actor)
• “New Zealand is a place where you can get well.” (James Nesbitt, an Irish actor)

New Zealand population statistics

The largest cities in New Zealand are Auckland (1.6 million people), Wellington (215,000 people) and Christchurch (383,000 People).

New Zealand has 10 cities with between 100,000 and 1.6 million people and 33 cities with between 10,000 and 100,000 people. The country is divided into 16 regions for local government purposes.

New Zealand is mainly an urban country, with almost 90% of its population living in urban areas and cities. The country’s rural population was reported at 13.38% in 2019.

Choosing the best city to live in New Zealand: The ultimate checklist

When choosing the best area to live in New Zealand, these are the key factors that you should consider:

1. City/town size

Do you want to live in a large city or in a small town? There is no “best part of New Zealand to live”. In reality, each place has its own advantages:

Advantages of living in a large city:

• Better job opportunities.
• Access to a mass transportation system.
• Plenty of shopping, food, and entertainment options.

Advantages of living in a small town:

• Low traffic.
• Lower cost of living.
• Proximity to nature.

2. Population size

Do you want to live in a densely or sparsely populated place? Perhaps you are looking for some of the best small towns to live in New Zealand?

Advantages of living in a densely populated place:

• Better quality of roads and buildings.
• Transport facilities are highly developed.
• Most amenities and entertainment locations are within easy reach.

Advantages of living in a sparsely populated place:

• Less crime.
• Natural beauty of landscape.
• Access to fresh air.

3. Rural/urban area

Whether you prefer rural or urban areas plays a big role in how to decide where to live in New Zealand!

Advantages of living in a rural area:

• More privacy.
• Larger homes.
• Cost of living is cheaper.

Advantages of living in an urban area:

• Meeting more people.
• Easy access to all amenities.
• Saving money by using public transport.

4. Climate

The weather will probably play a role in your decision about the best city to stay in New Zealand! The country is located within the boundaries of two climate zones. The country’s North Island falls within the subtropical climate zone, and the South Island falls within the temperate climate zone.

Perhaps the words “subtropical” and “temperate” lead to the popular false assumption that New Zealand is a warm country! In reality, the weather is often variable. The North Island can get extremely hot in the summer, while the alpine areas of the South Island can be as cold as -10°C in winter. Keep on reading to discover the city with best weather in New Zealand!

5. Transport

Transport is a serious factor to consider when choosing what the best city to live in New Zealand is.

Advantages of living in/near an important transport hub:

• Shorter travel distances.
• Cheaper commuting.
• Helping the environment by not using vehicles.

Disadvantages of living in/near an important transport hub:

• Noise pollution.
• Traffic snags.
• Congested sidewalks and roads.

6. Local infrastructure

Some of the most important infrastructural facilities that contribute to what the best place to live and work in New Zealand are:

• Road and railway transport system.
• Communication networks.
• Electric systems.

7. Work / career / business

If you are settling down somewhere, then you will probably be interested in finding good career opportunities there. You probably want to look for the best city to work in New Zealand. Geography can influence career decisions in numerous ways. You will need to decide what the best places to stay in New Zealand are for your specific career path.

8. Crime rate

You will also want to find a safe area to live in and probably look for the best place to live in New Zealand for families. Some factors that constitute an area’s crime rate include:

• Violent crime.
• Vandalism.
• Theft/burglary.

9. Ecology

Some ecological factors that you may also want to consider when choosing the best cities to live in New Zealand are:

• Access to clean water.
• Environmental diversity.
• Low levels of pollution.

10. Rental prices

Deciding on what the best place in New Zealand is probably also depends quite a lot on each city’s rental prices! In New Zealand, the lowest to highest average rental price for a two-bedroom, unfurnished apartment ranges from NZ$1,500 per month in cheaper areas to NZ$2,000.

Best places to live in New Zealand

Auckland

Are you wondering what the best places to stay in Auckland New Zealand are? Curious about life in the city? Read on!

• City size: 531 square kilometres (km²).
• Population size: 1,600,000.
• Rural or urban: Urban.
• Climate: Warm, coastal climate without any temperature extremes.
• Transport: Public transport in Auckland consists of buses, trains, and ferry.
• Local infrastructure: Excellent infrastructure with a lot of government funding to support development.
• Work: Auckland is a great place to start and/or develop one’s career, with job availability in every sector imaginable.
• Crime rate: The level of crime is low to moderate.
• Ecology: While the quality of the air is relatively pure, there is some air pollution.
• Rental prices: The average weekly rent for an Auckland home is approximately NZ$600.

The Economist crowned Auckland with the honourable title “The most liveable city in the world”. Eager to know why? Watch this amazing video:

Christchurch

Looking for the best place to stay in Christchurch New Zealand? Here are some facts about it!

• City size: 1,426 km².
• Population size: 381,500.
• Rural or urban: Urban.
• Climate: Sunny, dry and often windy.
• Transport: Public transport in Christchurch consists of bus services and ferry.
• Local infrastructure: Christchurch infrastructure is excellent, with extensive developments to ensure a thriving community.
• Work: Christchurch is a prosperous place that offers many job opportunities.
• Crime rate: Crime rates are moderate and decreasing in recent years.
• Ecology: Christchurch is characterised by unique biodiversity, which the community works to protect.
• Rental prices: The average rent for a three-bedroom property in Christchurch is approximately NZ$500 per week or more for the very best place to live in Christchurch NZ.

Coromandel

If you’re interested in the best places to stay in Coromandel New Zealand, keep reading!

• City size: 40 kilometres wide at its broadest point.
• Population size: Almost 2,000.
• Rural or urban: Rural.
• Climate: Warm and temperate, with significant amounts of rainfall.
• Transport: Coromandel public transport options include buses and ferries.
• Local infrastructure: Local infrastructure faces pressure and growing demands from the area’s tourism growth.
• Work: Coromandel has a strong tourism industry, which offers a lot of opportunities for work.
• Crime rate: While there is bound to be some petty crime in tourist-heavy spots like Coromandel, it enjoys a relatively low crime rate.
• Ecology: With its ecological and wildlife sanctuaries, it is a highly environment-friendly place.
• Rental prices: The average rent for houses in Coromandel is NZ$475 per week.

Dunedin

Did your search for the “best place to stay in Dunedin New Zealand” lead you here? You’re in the right place!

• City size: 3,314 km².
• Population size: 128,800.
• Rural or urban: Urban.
• Climate: Summer in Dunedin is warm, but rainy, while the winter is cool.
• Transport: A bus network serves as affordable transportation in the city.
• Local infrastructure: Infrastructure in Dunedin is good, with the government actively working to upgrade drinking water and wastewater infrastructure.
• Work: Dunedin is a good choice for people seeking out a diverse range of employment opportunities.
• Crime rate: The crime rate is rated as low to very low, making it a very safe place to live in.
• Ecology: When it comes to ecology in Dunedin, there are some concerns that the government is addressing about pollution and rubbish dumped within the natural environment.
• Rental prices: Rental prices can range from NZ$270 to NZ$515 depending on the area of the city.

Hamilton

Want to find the best place to live in Hamilton NZ? Learn everything you need to know about the area here.

• City size: 110 km².
• Population size: 176,500.
• Rural or urban: Urban.
• Climate: May to August is warm and humid. Winter is cold and can even be snowy.
• Transport: Public transport in Hamilton consists of only buses.
• Local infrastructure: There are active plans to invest in Hamilton’s infrastructure, focusing particularly on its transit system.
• Work: The city offers plenty of work opportunities, with many youth jobs available.
• Crime rate: Hamilton’s crime rates have been described as moderate to high.
• Ecology: While Hamilton does suffer from some pollution, the government is trying to tackle the leading sources of emissions in the city.
• Rental prices: The average weekly rent in Hamilton is between NZ$400 and NZ$500.

Marlborough

To learn all about the location and best places to stay in Marlborough New Zealand, read on!

• City size: 12,484 km².
• Population size: 49,200.
• Rural or urban: Mostly rural.
• Climate: Dry climate with frequent summer droughts.
• Transport: Transport in Marlborough consists of bus and ferry.
• Local infrastructure: Marlborough’s infrastructure development is a priority for the government in order to support the growth of local businesses.
• Work: As one of the country’s major wine industry locations, there is work in this sector which offers excellent prospects.
• Crime rate: Marlborough is a safe area, with police there having the highest total crime resolution rate for any area in New Zealand in the past.
• Ecology: Marlborough offers a beautiful natural environment, and the city works to manage any stress pollution effectively.
• Rental prices: The average rental price in Marlborough is NZ$430 per week.

Nelson

Are you curious about what the best places to stay in Nelson NZ are? We have all the answers for you!

• City size: 422.2 km².
• Population size: 52,900.
• Rural or urban: Urban.
• Climate: Summer in Nelson is mild and warm, and winter is cool.
• Transport: Nelson offers air, bus, train and ferry transport options.
• Local infrastructure: There is a good number of development projects currently taking place in the increasingly popular area.
• Work: Nelson offers many work opportunities, not only in the corporate world but also in its thriving art scene.
• Crime rate: The area is very safe with low levels of crime.
• Ecology: Air quality in Nelson can be affected by pollution.
• Rental prices: Apartments for rent in Nelson start at NZ$320 per week, and you will have to pay even more for the best place to stay in Nelson New Zealand.

Wellington

“What is the best place to stay in Wellington New Zealand” is a popular question online. Find out why here!

• City size: 444 km².
• Population size: 215,100.
• Rural or urban: Urban.
• Climate: The city is windy, particularly in winter. The warmer months are December to April.
• Transport: Wellington has a well-developed public transport system consisting of electric and diesel buses, commuter trains, ferries, and a funicular.
• Local infrastructure: Wellington boasts excellent infrastructure that is constantly upgraded.
• Work: Wellington, as a big city and the capital of NZ, offers a great number of job opportunities.
• Crime rate: Crime in Wellington is low to moderate but on the increase.
• Ecology: While Wellington faces air pollution from cars, it is an environmentally conscious city.
• Rental prices: The average rent for a three-bedroom property is NZ$640 per week or more for the best place to live in Wellington NZ.

Blenheim

Are you here to find out about the best places to stay in Blenheim NZ? You’re at the right place!

• City size: 17.2 km².
• Population size: 28,200.
• Rural or urban: Rural.
• Climate: Warm and temperate climate with rainfall.
• Transport: Transport in Blenheim consists of bus networks and ferry.
• Local infrastructure: There is progressive implementation of various housing and other infrastructure projects.
• Work: While Blenheim does not provide as many job opportunities as a big city, it belongs to the wider area of Marlborough, which offers more work.
• Crime rate: The levels of crime in the area are moderate.
• Ecology: Blenheim has been reported to breach air pollution standards in recent years, so, ecologically, there is room for improvement.
• Rental prices: An apartment for rent in Blenheim is priced at upwards of NZ$420.

Queenstown

Interested in the best place to stay in Queenstown New Zealand? Keep on reading!

• City size: 8,705 km².
• Population size: 16,000.
• Rural or urban: Urban.
• Climate: Summer is warm, while winter can be cold and even snowy.
• Transport: Queenstown offers a wealth of transport options from public buses to track shuttles and water taxis.
• Local infrastructure: Infrastructure in Queensland is top-notch.
• Work: Queensland is a fantastic choice of place for jobseekers of all ages.
• Crime rate: Crime is reported to be on the rise in Queenstown.
• Ecology: Queenstown, as a city, is dedicated to combating plastic pollution and protecting the environment.
• Rental prices: The average rental price in the area starts around NZ$350 and moving upwards for the best places to stay in Queenstown New Zealand.

Rotorua

Are you here to learn about Rotorua? Then keep on reading!

• City size: 2,615 km².
• Population size: 77,300.
• Rural or urban: Mostly rural.
• Climate: Mild, temperate climate.
• Transport: A network of buses serves the area of Rotorua.
• Local infrastructure: New Zealand’s government is committed to improving infrastructure in Rotorua, as it is one of the country’s most popular tourist destinations.
• Work: There are plenty of opportunities in hotels and the hospitality industry within the city.
• Crime rate: The level of crime is moderate to high compared to other places in New Zealand.
• Ecology: There are many conservation initiatives in the area.
• Rental prices: Prices for apartments for rent in Rotorua range from NZ$200 to NZ$420 per week.

New Plymouth

Looking to stay in New Plymouth? This paragraph’s for you!

• City size: 2,206 km².
• Population size: 80,679.
• Rural or urban: Urban, with a vibe of rural spaciousness.
• Climate: Warm and temperate with significant rainfall.
• Transport: Buses are the main form of public transport around New Plymouth.
• Local infrastructure: When it comes to land development and infrastructure, the area is currently being heavily invested in.
• Work: Since New Plymouth is an area rich in natural resources and with a strong dairy sector, job opportunities abound.
• Crime rate: The crime levels are moderate.
• Ecology: The city is focused on fighting against the problems of plastic and pollution in the ocean.
• Rental prices: Apartments for rent in New Plymouth go for NZ$235 or more.

Napier

Keep reading to learn all about the area of Napier!

• City size: 105 km².
• Population size: 65,000.
• Rural or urban: Urban.
• Climate: Warm and temperate with significant rainfall.
• Transport: The city has modern and affordable forms of transport, among which buses and trains.
• Local infrastructure: Plans to develop an inland port in the city are currently underway.
• Work: Napier is a popular tourist city, where work opportunities abound.
• Crime rate: Crime rates are moderate to high compared to other places in the country.
• Ecology: Levels of air quality in Napier are monitored to ensure a level of protection for humans and the environment.
• Rental prices: Properties for rent in Napier are priced around NZ$375.

Tauranga

Tauranga is another one of the best places to stay in North Island New Zealand.

• City size: 168 km².
• Population size: 151,300.
• Rural or urban: Mostly urban.
• Climate: Subtropical and humid.
• Transport: Tauranga’s public transport system consists of trains and buses.
• Local infrastructure: Recently the city has somewhat fallen behind on its infrastructure projects.
• Work: The area is rapidly developing and primed to become one of the best places to stay in New Zealand North Island.
• Crime rate: The crime rates are moderate to low.
• Ecology: Protecting the environment is a top priority for the city.
• Rental prices: A central city apartment goes for NZ$470 per week.

Timaru

Did your search for “best places to stay South Island New Zealand” lead you here? It shouldn’t come as a surprise!

• City size: 33.98 km².
• Population size: 28,700.
• Rural or urban: Urban.
• Climate: Warm and temperate, with rain even during dry months.
• Transport: The transport system mainly consists of buses.
• Local infrastructure: A lot of work is being done to improve landfills and roads, among other projects.
• Work: Employment opportunities are not as easy to find as in bigger cities, but there is room for starting a business in this developing place.
• Crime rate: Recorded crime in the area has been falling, a reason for which it is considered one of the best places to stay in South Island New Zealand.
• Ecology: Timaru has faced some air quality issues in the past – a situation that is improving.
• Rental prices: Prices for rental apartments start from NZ$210 per week.

Auckland – the very best city in New Zealand!

So where is the best place to live in New Zealand? The country has a lot to offer, no matter which city you choose. Yet, if you are struggling to decide on what the best town to live in New Zealand is… we recommend Auckland.

Auckland is a modern and thriving first-world city. With constant public transportation upgrades. And home to 27 Regional Parks. It is an ideal destination offering a perfect balance between business opportunities and an outdoor lifestyle. CGPM specialises in renting out residential homes in this wonderful city. Call CGPM today to learn more!

The post 15 best places to live in New Zealand: An honest review appeared first on Clarke Group Property Management | Auckland Property Management.

Are you having trouble deciding whether buying property in New Zealand as a foreigner is worth it? The truth is it’s a decision that needs thorough consideration. However, we are here to rescue! In this article, we will provide you with the ultimate list of pros and cons to help you make your decision. Read on to discover:

• the restrictions and requirements for buying property in New Zealand as a foreigner
• how buying property in NZ can be a lucrative investment
• the difficulties you will encounter while investing in NZ property

Can foreigners buy NZ property?

Let’s start from the beginning! While there are rules as to the minimum amount required and specific guidelines to how this must be done, the answer to the question “Can foreigners buy property in New Zealand?” is yes. To learn about all NZ investment rules and requirements for buying property in New Zealand for foreigners, check out our article.

The pros of buying NZ property as a foreigner

1. Buying new homes is safer

All building work in New Zealand must meet certain standards in order to be considered safe, healthy and durable. The country has a very effective building regulatory system that conducts regular checks and ensures all buildings are of top-notch quality.

2. Generously sized properties

Roomy properties with spacious gardens are typical in New Zealand. The average size of property sold in Auckland over the past eight years was approximately 135 square meters, and the average new house across the country is 195 square meters.

While this is smaller than Australia and the United States, houses in NZ are much larger than in most of the world, given the average size in Europe and many parts of Asia ranges from 76 square meters to 112 square meters.

3. Political stability

The country’s political stability positively influences property ownership. Investors who have dedicated time and resources to offshore property investment in NZ can take comfort and confidence in the fact that the country boasts one of the world’s most stable parliamentary democracies. Voters keep showing preference for the country’s two main political parties, meaning that foreigners can invest safely, knowing that there will be no sudden and dramatic change of policies.

4. Low crime rates

New Zealand is consistently ranked in international surveys as one of the world’s safest countries. This is a very important factor for property investors, as it means homeowners can enjoy a secure life without worrying about their children playing outside or their belongings being stolen.

5. Rapidly growing economy

New Zealand’s free-market economy is characterized by strong exports, advanced agricultural production, high net migration, strong tourism, robust construction activity, and low interest rates. This bodes very well for property ownership since the country’s exceptional economic performance creates jobs and draws people in who will eventually need housing and look for property for sale in NZ.

6. Swiftly developing housing market

New Zealand’s housing market has been described as being “on fire” currently, which is great news for property investors. With record-low interest rates, buyers are competing to secure properties, and there is more demand than supply.

This means that, at the moment, there is not enough property for sale in New Zealand. The number of houses on the market in New Zealand is at an all-time low, which means that it is a particularly good time for developers to benefit by pushing through with new projects.

7. Highly regulated property market

The country’s government is on top of the NZ property market, strictly regulating it with measures to tackle runaway house prices, prevent the formation of a bubble, and unlock more land to increase the housing supply. These measures go a long way in making new property buyers feel secure about their investments. For more reasons why New Zealand housing market and Auckland in particular are so hot now, watch this amazing video:

8. Fewer restrictions for Australian citizens

If you are an Australian citizen interested in buying NZ property, you’re in luck. Various long-standing arrangements between Australia and New Zealand mean that there are fewer restrictions for Australian citizens vs. nationals from other countries coming into the NZ:

• Australians are automatically granted residence visas.
• Australians in NZ have the same social security entitlements as New Zealand citizens (i.e. jobseeker support, sole parent support, superannuation, veterans pension, etc.).
• Australians may apply for permanent residence after having held a residence visa continuously for two years.

9. Buying NZ property is very quick

The process of buying property in New Zealand is exceptionally fast, normally taking as little as 3 or 4 weeks, which is much quicker than in many other countries. After a bid is formally accepted, there can be no last-minute offers. This eliminates stress for property investors and makes the process straightforward.

10. Availability of online information for foreign property buyers

There are many informative blogs and websites, which can be very helpful for foreigners living abroad who are interested in the property investment New Zealand process. Some online resources to guide you are:

• Wise
• Linz
• Colliers

11. Becoming an NZ citizen through investment

Investing in NZ property can help you get citizenship by grant, which comes with a lot of benefits for foreigners living in New Zealand! To read more about how foreign property investors can apply for citizenship in New Zealand, check out our article. Some benefits that come with NZ citizenship are:

• high quality of life: NZ’s Quality-of-Life Index is estimated at 175.61, which is exceptionally high compared to the rest of the OECD
• opportunity to find a well-paid job in NZ
• great public services in NZ (e.g. public transportation, emergency services, and courts/judicial system)
• high-quality education: the country boasts prestigious universities such as the University of Auckland, the University of Otago, and the University of Canterbury
• great health care system
• NZ’s official language is the world’s lingua franca (English), which many foreigners already speak as a foreign language
• NZ is a multicultural place, where you’ll definitely find a local community coming from your country. The NZ government does a lot to integrate immigrants into the community, from helping to assign them work that matches their skills and qualifications to offering pre-paid English language tuition to help them confidently use English and encouraging their integration into social networks and groups
• beautiful nature: New Zealand is a country that is famous for its stunning scenery, from vast mountain chains to grand volcanoes, lush rainforests, and incredible beaches
• nice climate: in NZ, which is relatively temperate and warm although, even alpine conditions can be found in mountainous areas, with a dry period in the summer
• NZ is an eco-friendly country. It is aiming to become 100% powered by renewable energy and has some of the cleanest and safest air on the planet

12. Dual citizenship

New Zealand allows dual citizenship, which can bring a lot of benefits for foreigners. Just make sure before applying for NZ citizenship that your country of origin also allows it!

Here is a list of countries that allow it: Albania, Algeria, Angola, Antigua & Barbuda, Argentina, Armenia, Australia, Bangladesh, Barbados, Belgium, Belize, Benin, Bolivia, Brazil, Bulgaria, Canada, Chile, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Jamaica, Kosovo, Latvia, Luxembourg, Malawi, Malta, Mexico, Nigeria, Norway, Pakistan, Panama, Peru, Philippines, Portugal, Romania, Russia, Serbia, Slovenia, South Africa, South Korea, Spain, Sweden, Switzerland, Syria, Turkey, United Kingdom, the United States of America, and Vanuatu.

The cons of buying NZ property as a foreigner

1. Property is expensive and prices are rising

While the answer to the question “Can foreigners buy property in New Zealand?” is yes, you have to keep in mind that the NZ property market is buoyant, which means that houses are very expensive. During the last quarter of 2020, we saw an average 8.7% increase in New Zealand property prices across the board.
When it comes to NZ property for sale, in Auckland City the average house price was $1,088,250 and even Manukau City hit a new record topping $1m. Sufficient funds to afford these high prices are the number 1 challenge faced by most potential buyers.

2. There are strict regulations for foreign property investors, especially if they don’t intend to live in New Zealand

As a foreign investor, you have to abide by certain laws and regulations which can be very restrictive, especially if you do not intend to live in the country. The OIO (Overseas Investment Office) requires you to demonstrate that your property purchase will benefit New Zealand in certain ways, for example by increasing the available housing stock, providing accommodation to vulnerable groups, or benefiting the community if the property will not be residential.

3. The property you buy must meet certain requirements

Non-residential property must make a contribution to New Zealand’s economy or society (through rental income kept in NZ$) and must not be meant for personal use. To find out the specific requirements in more detail, head to our article.

4. Foreign buyers must hold an NZ bank account

Non-residents will have to open an NZ bank account to buy property in New Zealand, which can cause some difficulties. While it is quite easy to open a bank account in New Zealand from overseas, you will have to personally visit a branch to activate it once you arrive, so it cannot be done remotely. Still, New Zealand banks offer many account options suitable for ex-pats.

5. If your final goal is to get NZ citizenship, the property is not a golden ticket

To obtain New Zealand citizenship you must prove tax residency amongst other things. The property will not allow you to sidestep the many requirements.

6. Achieving New Zealand citizenship is a slow process

Once you are in a position to achieve citizenship, you will find that it is a long, drawn-out process that, in fact, can take several years, so you have to be patient and truly committed to your NZ property investment.

7. New Zealand has a very high cost of living

Potential buyers must bear in mind that the cost of living in New Zealand is very high, on average 10% higher than in the United States.

A single person’s estimated monthly living costs (excluding rent) are around 1,325NZ$ (US$1000), with rent for a small apartment clocking in at around 2,239NZ$. For a family of four living costs rise to nearly 5,000NZ$ excluding rent!

8. Distance costs money

New Zealand’s remote location may mean that, unless you are from Australia, you will spend a lot of time and money on flights while you go through the New Zealand property investment process.

9. Local representation is crucial for success

As a foreign investor buying property in New Zealand, non-resident advice from a representative with local expertise can be a crucial decision for the success of your investment. However, help is at hand. At CGPM, we specialise in guiding foreign investors through the whole property management process and offer unparalleled local market advice. Make CGPM your first call, and we will help you on your investment journey!

New Zealand’s lucrative housing market

The New Zealand property market clearly represents a hugely attractive and lucrative opportunity to foreign investors. New Zealand’s safe and politically stable environment combined with high property appreciation make fertile ground for growth and yield high returns. However, the myriad national regulations necessitate local knowledge to ensure your foreign ownership of property in New Zealand goes smoothly and your investment is profitable.

The pros plainly outweigh the cons once you fully explore the investment opportunities. The ultimate decision is up to you but the experts at CGPM are waiting to answer your questions and guide you through all the stages of the property management process.

The post Pros & cons of buying property in New Zealand for foreigners appeared first on Clarke Group Property Management | Auckland Property Management.

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Are you looking for property investment NZ advice? Baffled as to where to buy a house to rent out? Or maybe resorting to Google typing “investment opportunities NZ”? The truth is it’s not always easy for property buyers to choose the right place to invest in. Figuring out which neighbourhood will be the most lucrative in future years can be a daunting task. But we are here to provide you with expert information on the Auckland suburbs bringing the highest rental income! Keep reading this article, where we will tell you:

• Why New Zealand and Auckland, in particular, is a great place for buying property
• What you should look for when investing in property
• Which are the best suburbs in Auckland to invest in

​The appeal of New Zealand property investment for foreign buyers

Despite New Zealand’s 2018 ban on the sale of homes to foreigners, which was followed by the COVID-19 pandemic, cross-border investor interest in New Zealand property remains high. Some of the reasons for this are:

• because New Zealand’s location is a geographical asset to wealthy individuals’ Asia funds and the Asian region is expected to recover financially from COVID-19 quicker than Western countries;
• because the country’s property sale and purchase rules are very clear and its court system functions well, which results in people considering property investing in New Zealand to be safe;
• because Prime Minister Jacinda Ardern directly appealed to wealthy investors to set up shops in the country in order to help the country’s economy after the pandemic. This move led to companies like Microsoft swiftly opening offices there. The country’s market is rated high for transparency, which reassures investors.

The appeal of Auckland for foreign property investors

Auckland is a city that is especially appealing to property investors from all over the world. This is because:

• it has a strong construction pipeline, especially for housing, which drives its growth;
• it has seen enviable growth in population in recent years due to an increase in immigration;
• it is considered the country’s economic powerhouse, contributing almost 40% of the nation’s GDP and providing multiple New Zealand investment opportunities in a wide range of sectors.

Foreign millionaire investors who own NZ property

There are numerous well-known foreign millionaires who own property in New Zealand. Among them are Hollywood film director James Cameron, the billionaire Facebook investor and Paypal creator Peter Thiel, and even the Sultan of Brunei!

If you are asking yourself a question “how can I choose the best property to invest in”, watch this video:

​Auckland investment property in numbers

The statistics confirm that Auckland is favoured by global property investors. Foreign investment NZ-wide is significant.

Before the 2018 ban on home buying for foreigners, foreign home buyers accounted for under 3% of total property sales around the country. Yet this figure was 22% for Auckland, which accounts for about 30% of total property sales in New Zealand.

In 2020, the city saw a strong house price growth of 17.4% bringing the average price to NZ$ 1,040,000 – the country’s most expensive. It is no surprise, therefore, that residents of Auckland are largely choosing to rent with nearly 36% of its occupants living in rental accommodation. Rental yields in Auckland range from 6.09% to 7.18%, making property in the city a solid and profitable New Zealand investment.

​The Successful Property Investor’s Check-list

When choosing a property to invest in, there are certain factors that you should take into consideration in order to choose the right area and see some significant growth. Here is a checklist that will guide you in choosing high-growth suburbs and up-and-coming Auckland suburbs (2021):

• Transport: It is in your best interest as an investor to buy a property that has public transport and major roads close by. People rely on good roads and/or public transportation to go to work and travel, so access to trains and buses is a major selling point for renters.
• Amenities: Having amenities nearby, such as shops, restaurants, green parks, gyms, and entertainment facilities, will ensure your property is in an area with a high lifestyle appeal that is always sought after.
• Medicine: Proximity to medical centres is also very important, though people are usually unwilling to live near long-term care hospitals. That’s because seeing patients from their windows and listening to the droning sirens from ambulance cars is not a desirable result.
• Education: Proximity to schools, colleges, and universities is especially important either for the tenants who have families or for students seeking to rent an apartment.
• Growing population: A good indication that you will get your money’s worth from your property investing in New Zealand is when suburbs show strong and solid population growth. This means they will have a high demand for property eventually, which will make your property easier to rent out.
• Vacancy rate: Smart property investors should look for areas with low vacancy rates, in order to avoid having a vacant property which could strain them financially.
• Future developments: Before investing, you should find out what future developments have been planned for the area. These could affect your investment property positively (i.e. a new shopping centre) or negatively (i.e. a landfill or too many residential buildings which could have an impact on your property’s demand). Local councils should be able to inform you about planned developments.

​Auckland’s most lucrative suburbs

Here are the top 10 suburbs in Auckland that rank first among landlords, bringing some of the highest rental incomes:

1. Orere Point: Orere Point has been estimated to provide a return that was more than the cost of borrowing the money to buy a property with a median rental yield of 6.1%. The population has increased by 14.5% in the last five years, showing incredible growth. It is an area with good access to public transport, many amenities, schools and medical centres that is characterised by a very low vacancy rate.
2. Auckland Central: With a 4.9% median rental yield, Auckland Central is a fantastic area for property investment in New Zealand. With low vacancy rates, an abundance of transport options, public services and amenities on offer, and a growing population, it is certain to bring investors a healthy profit.
3. Grafton: Grafton’s median rental yield is estimated at 4.8%. The area offers a good choice of public transport, schools, medical centres, and lifestyle amenities. While its population has not grown significantly, it is experiencing an influx of immigrant residents and low vacancy rates.
4. Otara: Otara is a rather crowded suburb with very low vacancy rates, where investors can enjoy high rental yields. According to the last census information, it has a population growth of around 10% since the 2013 census and it has a good transport system, medical centres, schools, and a large selection of amenities.
5. Clendon Park: Clendon Park’s median rental yield is around 4.5%. Its population is steadily rising as it provides residents with anything they could possibly want: good transport options, public services, and many amenities. The majority of the suburb’s occupants are renters.
6. Orakei: Orakei is a very popular suburb for expatriates, with 7.2% of British nationals in Auckland choosing this particular area for its exceptional lifestyle amenities and many schooling options for their children. Houses in the area are rapidly increasing in price, as is the number of renters.
7. Epsom: Epsom is a popular area located close to highly desirable prime locations. This suburb is known as ‘the Grammar Zone’, since it is home to the city’s best schools. With house prices in Epsom rising fast, renting is becoming more and more popular in the area.
8. Franklin: According to the census data, Franklin has grown more quickly than wider Auckland in the last five years. The area is great for property investors, as it has a very low vacancy rate, while at the same time offering all necessary amenities and services for its residents.
9. West Auckland: For the past 20 years, Auckland’s population grew at an average rate of 1.9% per annum. Being so close to the city’s CBD, West Auckland is a perfect choice of area to buy property in.
10. The North Shore: The North Shore is one of the fastest growing areas in the country, with a growing population and many planned future developments, making it the best place to buy investment property in New Zealand (or one of them!). With vacancy rates for rentals currently going down, investing in NZ’s North Shore is a no-brainer.

Welcome to New Zealand!

Investment property New Zealand-wide is a great choice for buyers – local and international alike. The country is becoming increasingly popular around the world, praised for its effective leadership, environmentally friendly strategies, and financial transparency for businesses, which are all factors driving foreign investors to the country.

The numbers and statistics are showing that Auckland, in particular, is very sought by investors from all over the world. Many of the city’s suburbs fulfill the criteria of our “Successful Property Investor’s Check-list”, which makes them a deserving choice for a sophisticated property investor.

If you already are an Auckland real estate owner, you are wholeheartedly welcome to CGPM! With our Property Management expertise, we will be glad to help you handle any property-related issues. Alternatively, our Property Managers can provide you with a Free Rental Appraisal as banks often require this when lending money. CGPM aims to make your renting experience an enjoyable one!

The post New Zealand property investment: Top 10 Auckland suburbs bringing the highest rental income appeared first on Clarke Group Property Management | Auckland Property Management.

1. Key selling points of a rental property

An Auckland Property Manager doing a rental property valuation for you will do a market research of properties in your area and weigh up the pros and cons of each property. This will help identify key selling points of your home.

The most common selling points of rental properties are:

• Newly renovated
• Secure car parking
• New appliances
• New or modern Kitchen
• Cooling and Heating systems like a heat pump
• Ventilation systems like HRV
• Security system that includes an alarm

Can you list the key selling points for your home?

2. Demand in your area

Visit trademe.co.nz and search for properties in your area that have the same number of bathrooms, the same number of bedrooms, etc. If there are only 2 properties available for rent in your area, you may have a better chance at renting your home out for top rent.

Three factors which demand levels depend on are:

• job growth (i.e. multiplying work opportunities in the area)
• elevated home prices driving people to rent instead
• lifestyle preferences (e.g. a preference for an urban lifestyle with proximity to amenities, green space, markets, and transport hubs)

3. Rental statistics for the area

In New Zealand, the Government collects rental data by each location. You can find this information here.

These figures offer a good insight into what sort of weekly rent you could fetch for your property.

You need to be careful not to price your property too high above the average rent in the area, or this could cause tenants to question why you have done this. If you think your property is worth more than the maximum average, you need to make sure you give valid reasons for this. For example, a heated swimming pool.

4. Experience in property management

Our Property Managers have had numerous years working in the Auckland area inspecting large numbers of properties and setting weekly rents for those properties. Property Managers will have a pretty good idea of what the maximum rent might be should you decide to sign up with them to market your property.

Remember Property Management companies have access to a large number of ‘Agent-Only’ websites to market your property on that you would not otherwise have access to.

5. Data

Property Management companies use Property Management software which allows them to print out reports that show them the average rent they have collected in a specific location over a certain period of time. This will also help them to value your property’s weekly rent more accurately.

6. Ensuring top rents are achieved

Every 12 months your Property Management company will undertake a rent review. Here we do a full rental appraisal report to gain knowledge of where current rents are in the current market. If it is evident your property is worth more, we will write to your tenants to advise them of a rent increase.

We will always discuss this rent increase with the tenant first to see if they are comfortable with this. If not, it may force them to move out, and if depending on the current market you may have difficulty replacing the tenant in a timely manner. Sometimes it is best to keep a good tenant, and only increase the rent by a smaller amount. Communication is our number one priority during this process.

7. Property Management – Level 4 Certificate

Check to see if your future Property Manager has the Level 4 Property Management Certificate.

The New Zealand Certificate in Residential Property Management (Level 4) gives Property Managers confidence to complete rental appraisals, manage tenancy disputes, marketing properties, and understanding industry legislation.

The modules covered are:

• Module 1 – Legal and Theoretical Knowledge
• Module 2 – Establishing Residential Tenancy Management
• Module 3 – Establishing a Residential Tenancy
• Module 4 – Maintaining Residential Tenancies

8. Tenant screening process

It is not about placing tenants into your home quickly; it is more about choosing the best tenant to live in your home long term.

Our Property Managers will screen tenants in a number of ways, including doing previous landlord checks, previous employer checks, current employer checks, credit checks, and tenancy tribunal checks.

You want respectful tenants, who are considerate and pay their rent on time.

9. Mediation

When your tenant misses rent payments, a 14 day Breach of Contract letter is sent out to the tenant, advising them they need to make payment on such and such a date or will need to go to mediation to sort the matter. If mediation is required there will be a face-to-face meeting or a telephone conference call with an official tenancy officer, tenant, and the Property Manager.

10. Protection from potential disputes at the Tenancy Tribunal

Worst case scenario, your Property Manager has to take the tenant to court. With a Property Manager, you will be protected from potential disputes at the Tenancy Tribunal. When problems with tenants arise, Property Managers will provide representation for landlords.

Property Managers are knowledgeable when it comes to what information needs to be gathered to present at a Tribunal hearing, and what questions to expect. In most cases, they also have some legal training, which enables them to represent landlords successfully in Tenancy Tribunal cases.

11. Free Rental Appraisal

Right now Clarke Group Property Management are offering homeowners free rental appraisals.

Make sure you clean the property and get it ready just as you would if you were selling it.

Then you have 3 options:

1. We can come out to your property to view it in person
2. You can do a video walk-through tour of your property
3. You can email photos of the inside and outside of the property and email them to hello@cgpm.co.nz

Make sure you email us the key selling points, and if you have a rent indication from a neighbour, or what you are hoping to expect for it, you can list that info as well. As much info as possible will help us give you an accurate rental appraisal.

12. There are no obligations!

Clarke Group Property Management require a 30 days notice to cancel your agreement.

It’s time to make your decision!

If you are looking for an Auckland property valuation, you have come to the right place. Whether you are only just beginning as a landlord or have a lot of experience, you should not underestimate the benefits of using a professional Property Manager. Property management companies have access to data that your average landlord does not.

Years of training and successful experience in the rental property market means that CGPM Property Managers are particularly well-equipped to help you make the most out of your property financially. Use CGPM – the leader among property valuation Auckland companies – for all your property management needs. From online valuation of property services to full hands-on property management, give CGPM a try by getting your property valuation free now!

The post Estimating your Auckland property value: 15 reasons why you should talk to a professional Property Manager appeared first on Clarke Group Property Management | Auckland Property Management.

Worried that leasing Auckland rental properties that are pet-friendly can cause certain difficulties between landlords and tenants? It is very often the case. You can rest easy though. Why? Because we are here to provide the ultimate guide to make this task easier. Read on to learn:

• tips to market your rental properties in Auckland as pet-friendly
• what to avoid when renting to pet owners
• how to ensure you are protected from damages caused by pets

…and much more!

Before you make your decision

It is estimated that only 14%-17% of rentals are pet-friendly around New Zealand. This means that this type of property is rather scarce and, as such, there is a great demand for it.

Since more and more people are choosing to get pets (especially millennials, who happen to make up the largest proportion of renters currently), pet-friendly Auckland rental properties are always exceptionally popular with tenants.

Some pros of renting to pet owners are the facts that:

• Tenants are willing to pay more for properties that allow pets.
• Due to the low availability of pet-friendly properties, tenants are likely to stay longer when they find one. Landlords, therefore, have less tenant turnover.
• Pet owners tend to be reliable as individuals since caring for a pet requires a lot of responsibility.

Some cons, on the other hand, of renting to pet owners can include the facts that:

• Pets might cause damage to the rental property.
• Some pets can be very noisy, causing problems with the neighbours.
• Landlords may be held responsible in the rare event where pets may cause harm or injury.

Read on to find some practical tips for pet-friendly Auckland landlords!

Pets

1. Decide which pets you accept

There are many different pets one can have these days: from cats, dogs, rabbits, ferrets, and other rodents to fish, reptiles, birds, stick insects, and even miniature pigs! The most common ones, of course, are cats and dogs, followed by birds. Before signing a tenancy agreement you should decide firmly which pets you are ready to allow in your property and inform your potential tenant about it.

2. Decide on the number of pets accepted

The number of pets a landlord will accept depends on various factors, such as the local laws, the size of the property, their insurance policy, and the type and size of the pet. Ultimately, it is up to the landlord, based on these considerations, to decide how many pets they will allow.

3. Decide on accepting inside/outside pets

A factor to consider when deciding on what types of pets to accept is the pet’s habitat. There are pets that live indoors, others that can be only kept outside, and some that can be kept both inside and outside.

Cats and dogs can be kept both indoors and outdoors, depending on their breed and how they are raised. There are types of rabbits that specifically live indoors and others that thrive outside. Caged rodents and fish in tanks should be kept indoors. Check what type of environment your tenant’s pet needs.

House & Garden

4. Avoid white colour

To damage-proof your NZ rental property, avoid the colour white in general. This applies to walls, your carpets, and your furniture. Playful pets are very likely to leave visible stains on light-coloured surfaces that will be hard to clean.

5. Get rid of carpets

If you can avoid installing carpets in your Auckland rental property, do so. Pets, especially young ones, are likely to have accidents. Getting pet urine out of a carpet is pretty difficult and often requires taking the carpet to the dry-cleaner’s. This is both money- and time-consuming.

6. Buy pet-friendly furniture

A great idea for landlords offering Auckland houses for rent to pet owners is to equip your house in a pet-friendly manner. For example, try using:

• removable seat covers
• replaceable panels
• pet-proof trash cans
• armrest covers
• pet-resistant fabrics

7. Make pet doors

A pet door or flap is a small opening that allows pets to enter and exit a building on their own. They are most commonly designed for cats and dogs so that they can move independently, without the need for humans to open doors.

Normally, you would install a pet door on a front or back door that leads to a yard or garden or on a balcony door.

The average price of installing a medium-size pet door is just under $200.

8. Make a fence

A fence around the property will appeal to pet owners, as it ensures that their pet will stay off the road or picked up by a stranger. Fences enhance not only your property’s but also your pet’s security.

9. Build a doghouse

A doghouse can also be a good idea for landlords of pet-friendly properties. If the property features a garden, it encourages a dog to spend time outside in its own space rather than roaming around the interior.

Human Factor

10. Consult other pet-friendly landlords

If in doubt about offering your Auckland house to rent to pet owners, talking to other pet-friendly landlords can help! You can ask them questions about the best ways to deal with various issues and learn from their experiences.

To find other landlords, try:

• online NZ forums, such as www.propertytalk.com
• asking your family, friends, and acquaintances for recommendations of people to talk to
• posting on a relevant group on social media

11. Make an inquiry about your potential pet-owning tenant

To find information about a potential tenant, a good idea is to read reviews on landlord websites or ask for the opinion of the rental Auckland property management company or individual who accompanied them previously.

The type of information you should be interested in when it comes to screening tenants who own pets is whether they have been responsible during past tenancies. Have they had any pet-related issues with previous landlords? Are there any complaints against them, related to excessive noise or other issues?

If you discover that your tenant has had problems with previous tenancies because of their pet, talk to them to find out why. You should be discouraged if previous landlords report any pet-related problems. This indicates that the owners may not be responsible and that you are likely to encounter other problems, too.

Market Issues

12. Market yourself as a pet-friendly landlord

3 great ways to market yourself as a pet-friendly landlord are the following:

• Use photos of your pets in your marketing materials and social media.
• Support with the pet community and donate to animal charities.
• Hire a property manager to guarantee your message is communicated effectively.

13. Increase rent charges

Pet-friendly landlords normally increase their charges since their property is always in high demand.

14. Invest in property near parks (tip for landlords-to-be)

A great tip for pet-friendly landlords is to invest in properties near parks. Pet-owners are always on the lookout for properties nearby green spaces where they can walk and play with their dogs. Bonus points if your property is next to an actual dog park!

Legal Issues

15. Research local pet regulations

The city of Auckland has specific pet regulations for dog owners.

Among others, these are:

• Dog registration is mandatory in Auckland and dogs must be microchipped.
• It is mandatory to pick up after your dog and dispose of the waste responsibly.
• If you own two or more dogs, you will have to apply for a license that allows you to keep multiple dogs on your property.
• There are leash laws in the city, dictating where dogs can be unleashed.

It is necessary to check whether you and your property comply with these rules before renting to a pet owner.

16. Photograph your property before renting

It is also necessary to photograph your property before renting it in order to document the condition before a pet moved into it, in case damages occur during the tenancy and they are disputed by the tenants. Photographs will serve as proof of the original condition of the property.

Landlords should not forget to also photograph all the chattels, which are basically items that are ‘loose’ at the property. This includes anything not actually fixed to the property, such as furniture, plant pots, freestanding kitchen units, and intruder alarms, among other things.

17. Verbalise your restrictions

It is important to communicate your restrictions to your tenant before they move in. Be very clear when it comes to everything from what animals you will allow to how many of them, and define your expectations. Tell the pet-owner what their responsibilities are and what the consequences will be if the property incurs any damages.

Do not forget that pet rules should always be included into the tenancy agreement.

18. Enlist tenant’s costs

It is advisable for landlords to include the tenant’s costs into the tenancy agreement. The tenants should be aware in advance not only of what the amount of the pet deposit is but also of what costs they will be charged in case the pet clause of the tenancy agreement is broken.

Normally, pet owners will have to bear responsibility for:

• carpet and furniture cleaning
• pest treatment (e.g. in case of fleas)
• not getting more pets than the agreed amount
• their animals being vaccinated property

19. Charge a deposit (bond)

A deposit, or bond, is a sum of money that a tenant gives to the landlord in case there is damage to the property during their tenancy. This amount is kept or deducted from if something is broken at the end of a tenancy or, if not, it is returned.

It is advisable to take the deposit from tenants in the beginning of the tenancy before they move in so that there are no disputes later on if there are damages and they withhold it from you as a result. The maximum amount of bond that a landlord can charge is the equivalent of a 4-weeks’ rent.

20. Consult a Property Manager

A Property Manager can help you establish fair rules for pet-owning tenants. They can do this by screening tenants to ensure they are responsible, assessing pets to make sure they are the right fit for your rental property, and adding a special pet clause to the Tenancy Agreement. This will allow you peace of mind. If you have any questions about renting your pet-friendly property, contact CGPM today.

CGPM has years of experience with managing tenants with pets. Our team can offer further advice and assistance in this area. If you’re considering renting your property in Auckland, give us a call and we can organise a free Rental Appraisal.

Go with a Company you can trust, for the best rental property management service in Auckland offering competitive fees, choose CGPM.

The post 20 Practical Tips for Landlords Leasing Pet-Friendly Rental Properties in Auckland appeared first on Clarke Group Property Management | Auckland Property Management.

Did your search for ‘passive income NZ’ and ‘passive income ideas NZ’ lead you here? You have come to the right place! Real estate, i.e. buying property to rent, is one of the most reliable ways of making passive income. It guarantees a steady profit. If you are wondering how to get into it by buying houses for rent in Auckland, keep reading. We will tell you:

• how to create passive income by buying-to-rent
• where to find cheap houses for rent in Auckland

Many people perceive living from passive income as something very desirable because it does not take up one’s time. Normally, you earn money as an exchange for your time working. Passive income means you do not have to do anything beyond an initial investment to make a living. It has come to be seen as “the dream”. It allows you to make money while you sleep. Let’s see how you can achieve it!

1. Be ready for a difficult start

The first five things you will have to do in order to ensure you can make money from your rental property are:

• research the rental market in different neighbourhoods (start simply by Googling terms such as ‘houses to rent Wellington’, ‘houses for rent South Auckland’, ‘houses to rent in Auckland’);
• calculate your property rental expenses;
• choose your pricing correctly;
• be prepared to do or arrange for required maintenance work on the property;
• know your rights and what is demanded legally from you in this process.

While these initial preparations can turn out to be pretty time-and-money-consuming, rest assured that they are worth it. It is important to remember that the difficulties you will encounter in the beginning of the process are only temporary, whereas the result can help you earn a smart passive income.

2. Analyse Auckland’s rental market

Here are three things that you need to know about the rental market before embarking on your buy-to-rent journey:

• how much similar houses to rent in similar areas are going for;
• the fact that different types of properties can be attractive to tenants for different reasons (e.g. flats close to amenities are desirable for young professionals, while larger houses in the suburbs are preferred by families);
• only New Zealand, Australian and Singaporean citizens, as well as permanent residents, are currently eligible to buy houses and flats in the country.

Knowing these things will undoubtedly be an asset for you in building your passive income strategy because it will teach you how to identify and go for good opportunities in real estate, while also helping you keep realistic goals in mind when it comes to your returns.

3. Learn from other people’s mistakes

Analysing the experience of other people who have bought property to rent is one of the most constructive things you can do when learning how to make passive income. Seeing where they went wrong and asking them what they would have done differently can teach you a lot about what to expect and what to avoid.

3 popular NZ blogs often discussing the topic of passive income are:

• Passive Income NZ
• I find property
• Money King NZ

You can also discuss topics that are on your mind with other landlords on these 3 popular NZ landlord forums:

• Property Only
• Property Talk
• Share Trader

4. Think twice before taking a loan

While taking a loan can seem like a great idea as a starter landlord, it should only ever be used as a last resort. Take a loan in two cases:

• if you have savings that will make up a significant down payment;
• if the expected tenancy charge can cover the monthly payment.

You should refrain from taking a loan for rental property that will be too hard to pay off.

5. Buy a cheap house and renovate it

Buying a cheap house and renovating it can be a particularly rewarding scheme. There are numerous examples of successful businessmen who started from scratch by buying old property and investing in its renovation, making a fortune along the way.

Within 10 km of Auckland’s CBD, the cheapest district is Avondale, with a median property price of $800,000. Next is Northcote, with a median price of $921,000 and Glen Eden at $698,000.

6. Environment matters

Five factors that make a district popular with tenants are:

• transport infrastructure,
• amenities within the location (vicinity to grocery stores etc.),
• safety and security,
• availability of parks and outdoor spaces,
• easy parking.

On the other hand, five factors that can make a district unpopular with tenants are:

• unhygienic dirty areas,
• unrealistically priced areas,
• dangerous neighbourhoods,
• areas with no public transport,
• lack of schools and other major services.

Some of the most popular districts with houses for rent in Auckland are reported to be Northcote, New Lynn, Glen Innes, Wynyard Quarter, Manukau, Onehunga, Albany, Mt Roskill, and Waterview.

7. Rental property in your neighbourhood

If it is an option for you, it is a great idea to buy a rental property in your neighbourhood, near your home. The main reason for this is that it will cost you less to manage a property that is close to your base. The proximity means you will be able to meet and screen tenants personally, and it will allow you to be more involved in the rental process in general.

8. Decide on the tenancy period

When it comes to the tenancy period of your buy-to-rent property, you have various options as a landlord. Some of the advantages of renting property on a periodic or fixed tenancy are as follows:

• you develop a familiarity with your tenants, which builds a mutual understanding of expectations;
• there is less turnover of tenants, which means less risk of having an undesirable one;
• long-term tenants are more likely to take care of their property.
• However, renting property on a daily basis (for one or several days) can also have benefits. Landlords who choose to do that:
• can charge more than they would for a long-term rental;
• will likely not have to deal with many property issues during a tenant’s stay;
• face a reduced possibility for conflict with tenants.

Ultimately, whether a landlord chooses a long or short-term rental depends on what they are looking to get out of their property and how involved they want to be in managing it. A landlord who values reliability and familiar relationships with tenants should opt for a long-term rental. Someone who enjoys the social aspect of meeting new tenants and creating a welcoming holiday experience for them may prefer to choose short-term tenancies.

9. Get insured

Many landlords do not want to pay for insurance because they think it is expensive and a lot of hassle. Usually, this is because they have had a bad experience in the past or because they have never had a reason to rely on insurance.

However, the truth is that an insurance policy will give you peace of mind in case of an emergency. As a landlord, you will find that there are many pros to getting insured, like for example:

• you will be covered for damage to your property;
• you will be reimbursed for rent in events where the tenant does not pay;
• you will be covered for any legal fees which you could incur if either you or your tenants decide to take legal action over property issues.

Some of the most reliable insurance companies in Auckland include Tower, AA Insurance, and Initio. For tips on how to save on insurance, check out our blog on this topic.

10. Charge wisely

When deciding what you should charge for rent, take into account all of your landlord expenses. These normally include:

• water fixed charges
• utilities (if these are included in the rent)
• body corporate fees
• property rates
• mortgage payments
• accounting fees
• pest control and treatment
• property management fees
• insurance
• outdoor maintenance (landscaping, pool cleaning etc.)

Should you be willing to read the extensive list of landlord expenses, we’ve already covered it in one of our previous articles.

11. Choose responsible tenants

A responsible tenant is an individual who pays rent, utility, and other bills related to the property on time, while also keeping the interior and exterior of the rental property in good shape during their tenancy, always adhering to the terms of your tenancy agreement.

To ensure you choose a responsible tenant for your rental property, you need to carefully screen your prospective tenants. To assess a person’s reliability as a tenant, take into consideration factors such as their credit background, income, relevant criminal background, and rental history.

12. Rent to a company

A great option for people looking for ways to make passive income from buying property to rent is to rent to a company rather than individuals.

Oftentimes, multinational companies and modern start-ups prefer to rent flats and houses rather than offices. Corporate housing is appealing to people who travel to a specific location for work regularly, being away on business for weeks or months at a time. Corporate housing most commonly comes furnished and with utilities and services included, so it is a way to make employees feel “at home away from home”.

In some cases, it can be better to deal with a company rather than with individual tenants. This is because companies have a stable income, meaning they will always be able to pay you on time, and you get to professionally discuss all needs and requirements with one person only (usually an HR employee) rather than multiple tenants.

To find NZ companies looking for houses for rent, you should try listing your property on an online portal such as Corporate Keys.

13. Sign a tenancy agreement (if doing a normal tenancy)

A tenancy agreement is arguably the most important aspect of a tenancy. As a legally binding document that sets out the requirements and obligations for both landlord and tenant, it is necessary when it comes to settling possible disputes.

14. Take care of your tenants

It is important to maintain good relations with your tenants, as in this case they are more likely to want to stay longer in your house.

‘Maintaining good relations with your tenants’ implies:

• communicating with them on a regular basis to see if there are any issues with the tenancy;
• resolving maintenance problems quickly;
• going out of your way occasionally with kind acts, such as a welcoming gift.

It is always important to keep in mind that if you take care of your tenant, they will in turn take care of you and your home.

15. Count your money

It is advisable to write down your revenue and expenses if you intend on making a healthy profit from your rental property. Keeping track of your finances in an organised way means you can determine your level of success accurately. It lets you clearly see where you are making money and how you are spending it, which allows you to pinpoint areas where you can save. Keeping records that are accurate, up-to-date, and easy to use is essential for counting your profit.

16. Hire a property manager

Hiring a property manager can actually increase your passive income, even if you have to pay them as well! Given that passive income, by definition, suggests you do not put a lot of effort into a venture, a smart move is to let a property manager do the hard work for you while you enjoy the profits and reap the benefits.

Property managers can help you with issues such as figuring out how much to spend on buying your rental property, advising you on where to buy, and finding you the kinds of tenants that will respect your property. A property manager can help you make all the right decisions in order to maximize your income with the minimum of effort!

Property managers in NZ normally charge a commission of around 7-8.5% of gross rent in addition to some extra fees for advertising and administration. For more information on this, check out our blog.

Addressing a CGPM manager is a sure-fire way to guarantee success on your journey to earn passive income through renting! Our specialty lies in residential rental property management in Auckland, where we take care of over 300 properties deploying our proven systems to give other landlords like yourself the ultimate hands-off experience! Whether it is achieving the desired return you are after or gaining peace of mind that your property is being cared for… give us a go!

The post 16 Passive Income Life Hacks for NZ Landlords Owning Houses for Rent in Auckland appeared first on Clarke Group Property Management | Auckland Property Management.

Tenancy Tribunal in NZ

Are you looking for information about the NZ Tenancy Tribunal? You have come to the right place!

What is Tenancy Tribunal?

The Tenancy Tribunal is a type of court that deals with disputes between tenants and landlords. Hearings are held to settle these disputes with legally binding tribunal orders.

Which problems can the NZ Tenancy Tribunal solve?

The NZ Tenancy Tribunal can resolve various types of problems, such as tenancy disputes regarding:

• Overdue rent
• Unlawful entry by a landlord
• Damage to a rental property
• Harassment by tenant/landlord
• Breach of privacy by a landlord

Before for the hearing

1. Read the Residential Tenancies Act

The Residential Tenancies Act is a law governing landlord and tenant relations, setting out legal requirements and obligations that both parties must adhere to during residential tenancies.

To read the Residential Tenancies Act online, head to www.legislation.govt.nz.

Knowing the contents of the Residential Tenancies Act can help you understand your case and the claims against you better, which will allow you to represent yourself with confidence on the day of the hearing.

2. Study precedents

It is a good idea to have a look at past Tenancy Tribunal orders online to study previous cases that are similar to yours. Familiarising yourself with the various outcomes of different cases will help you prepare yourself for any unexpected questions directed at you at the hearing.

Tribunal order

A tribunal order is a ruling issued by an adjudicator to settle a dispute, normally on the day of the hearing. The order, a copy of which is received by both the landlord and the tenant, must be obeyed.

Tribunal orders are public information. They are published on the Ministry of Justice website, which means you can find other people’s tribunal orders there. The process is very simple and you don’t need to fill in all the fields – just select “Type” in the “Damages and Compensation” section, push the “Search” button, and download the PDF file.

It is not recommended to mention precedents during the hearing, since it is only the issues in a particular case and tribunal application that are considered and included in the decision.

3. Make a cross-application

A cross-application is an application filed when you already have a rental tribunal application made against you but also want to discuss other issues at the same time in one hearing.

Filing a cross-application means you get to paint an overall picture of your tenancy at a hearing and voice any other issues you may have had, which allows you to set the record straight when it comes to false accusations against you.

4. Resolve all questions in advance

People who apply to the Tenancy Tribunal for the first time usually have all sorts of questions about the hearing, ranging from what they should bring with them and what they should wear to what is considered supporting evidence.

In order to improve your chances of representing yourself efficiently and with confidence on the day of the hearing, it is advisable to resolve any questions you may have about it in reasonable advance:

• If there are 5 working days or less until your hearing – contact the Ministry of Justice

• If there are more than 5 working days until your hearing – contact Tenancy Services

5. Prepare your story in advance

• The tenant is supposed to tell the Tribunal their story related to the issue at hand, briefly and clearly.

• The landlord will also tell the dispute tribunal their story related to the issue at hand. If they are the applicant, they will explain their side first.

Your statement should be brief, offering a summary of the facts that lasts no longer than a couple of minutes. Writing your story down will help you remember key facts and important dates and ensure that you get your point across in the limited time you have.

While you should practice learning your story by heart before the hearing, you can read from your notes during the hearing as long as your delivery is confident.

Example tenant story

Potential applicants can insert the details of their own case into this example story, using it as a template:

“From the beginning of my tenancy in March 2019, I noticed the locks to my apartment were broken and I requested that my landlord, Mr. Jones, repairs them, to which he agreed. Despite repeated requests since then, both orally and in writing, Mr. Jones has not repaired the locks. This compromised the security of my premises to the extent that I suffered a break-in in August 2019, which caused me severe emotional distress. I have turned to the Tribunal to request compensation for the damages incurred as a result of the break-in and an immediate lock replacement”.

6. Engage with a professional property manager

The advantages of engaging a professional property manager to represent you include the following:

• Knowledge of the law: The law can be complicated and change regularly and lawyers are experts.
• Lawyers are familiar with the rules and procedures of the Tribunal and can help you understand the proceedings and outcomes you are facing.
• Property Managers can help you deal with paperwork related to your case, as well as gather and organize your evidence.

Unless you are dealing with a small claims tribunal, a property manager can be vital, particularly in cases where:

• the dispute is for more than $6,000;
• the other person has a lawyer representing them;
• the complexity of the issue is high.

On the day of the hearing

7. Attend the hearing

If you want your side regarding the dispute to be heard, you should attend the hearing. If you don’t attend it:

• the application will likely be dismissed if you are the applicant;
• an order, such as the tenancy being ended or you being charged a fee, will be made without you if you are not the applicant.

If you want to attend the hearing but cannot be in the area, you can arrange to participate by phone conference.

It is in your best interest that you avoid sending a representative to the hearing and represent yourself instead. This is because:

• You know your case better than anyone and, therefore, only you can answer any potential questions that may come up with detail and precision.
• It is not guaranteed that a representative will be able to advocate for your interests as passionately as you would.
• A representative may not be able to effectively communicate to you exactly what happened at the hearing in case it is unsuccessful and you need to appeal the decision.

8. Dress for success

On the day of the hearing, you should dress conservatively.

For men, a good option would be long trousers and a collared shirt, preferably with a tie, with or without a jacket.

Women can opt for a knee-length dress or skirt or trousers and a modest blouse or sweater.

While you don’t have to dress excessively formally, you should aim to dress respectfully so as to demonstrate you are taking the hearing seriously.

9. Arrive on time

Arriving on time for the hearing is important, as it shows the members of the Tribunal that you are respectful of the procedure.

Arriving at least 30 minutes before your hearing is scheduled is advisable.

10. Provide evidence

You should bring any evidence that supports your claim or your side of the issue to the Tribunal hearing. You should have two extra copies of all evidence, be it bank statements, photos or other documents – one for the adjudicator and one for the other person. Also, take with you all original documents that you submitted copies of with your application (such as the tenancy agreement, any correspondence etc.)

To be on the safe side, go through the following check-list on the day of the hearing:

• tenancy agreement

• rent summary

• 14-day notices

• Repairs and maintenance quotes

• bank statements

• accounts

• inspection reports

• a rental summary

• photos

• letters, etc.

11. Be honest

Tribunal hearings are less formal than normal court hearings. Yet at the beginning of the hearing, you will be asked to make a promise to tell only the truth.

Some reasons why it is a bad idea to lie during a Tribunal hearing are:

• If caught in a lie, you will lose the case.
• The hearings are public record, meaning your lie will be forever available online for scrutiny and could be exposed.
• The fact you lied after promising to tell the truth can jeopardize future tenancy and employment prospects.

12. Keep calm

Many people have never appeared in a courtroom before and, therefore, are inexperienced with advocating for themselves publicly. Representing oneself at a hearing requires a lot of work, such as gathering evidence related to the case, which can be a daunting task. For these reasons, a Tribunal hearing can often be perceived as a stressful affair.

While it is understandable that participants may feel emotional at the hearing, due to anger or disbelief for example, it is best to try and remain calm and be articulate. Excessively emotional participants can give a bad impression to the Tribunal members and that will not help them win their case.

To calm yourself down before a Tribunal hearing, try the following:

• take deep breaths to get oxygen into your brain and relax your body;

• practice positive self-talk in order to get yourself in a pleasant mood;

• practice your speech, as being prepared will help you stop feeling nervous.

14. Apply for a rehearing

If you disagree with a decision made at the Tenancy Tribunal hearing, you can either apply for a rehearing or appeal to the District Court.

You can apply for a rehearing within 5 working days of a decision being issued if you think:

• the decision was substantially wrong;

• a miscarriage of justice has or is likely to occur.

You can appeal to the District Court within 10 working days of a decision being issued if you think the decision is wrong based on the law.

You cannot appeal to the District Court:

• against an interim order;
• a final order for payment of less than $1000;
• a final order to undertake work worth less than $1000.

Avoiding Tribunal hearings in future

15. Address your property manager first

An important part of the professional expertise of a property manager are good communication skills. Property managers specialise in promoting healthy landlord-tenant relationships and have an expert knowledge of residential laws, which helps them to act as a mediator in resolving disputes before a matter escalates and is taken to the Tenancy Tribunal.

Have a property-related issue? Ask a CGPM property manager!

At Clarke Group Property Management (CGPM), we provide the best tenancy services NZ has to offer. Our property managers are trained to handle all types of issues to ensure you can enjoy a stress-free tenancy experience and they can help you resolve any landlord-tenant disputes before or even instead of addressing the Tenancy Tribunal.

The post 15 Surefire Tips to Win a Tenancy Tribunal Hearing in New Zealand (+INFOGRAPHIC) appeared first on Clarke Group Property Management | Auckland Property Management.

House insurance: terms and definitions

Defining house insurance

Are you finding yourself wondering “How does house insurance work?” We are here to explain. House insurance is a type of insurance policy that covers damage to your home.

There are different levels of coverage that homeowners can go for, ranging from basic to more comprehensive policies. We will explore the options related to house insurance in New Zealand below.

The difference between house insurance, home insurance, and homeowner’s insurance

While the terms are often used interchangeably, there is a difference between house insurance, home insurance, and homeowner’s insurance.

• House insurance when buying a house is usually mandatory and refers to a policy that protects one’s house.
• Homeowner’s insurance, or home insurance, is a more encompassing policy that covers more than one’s actual house, including other structures on the property and personal belongings contained within it.

Losses covered by house insurance

What does house insurance cover in New Zealand? House insurance covers losses from perils that might cause sudden and accidental damage to your home. This typically includes the cost to repair, rebuild, or replace your home.

Cutting costs on house insurance

Insurance company

1. Insurance company choice

What to consider when choosing an insurance company

Purchasing insurance for your home can be overwhelming, but it is necessary. To make sure you are choosing the right insurance company, you should consider the following:

• the company’s history and reputation;
• the company’s financial strength;
• the types of coverage offered by the company.

Where to find a trustworthy insurance company

A good way to find a trustworthy insurance company is to ask friends and family who own homes for referrals and recommendations, as they will offer unbiased reviews based on their experiences.

Different insurance companies offer different price policies

So how much do you pay for house insurance? There are many factors affecting the price of your policy, which can vary depending on the insurer. Different companies offer different discounts to clients, based on factors such as their loyalty to the company or how well-equipped their home is.

2. Financial stability of your home insurance company

There are different ways to check an insurer’s financial stability:

• Ratings: Ratings companies specialize in rating insurance companies based on factors such as financial leverage and offer their services online for free.
• Complaints: Official complaints regarding unpaid claims filed by customers are registered and publicly available online.
• Business history: Standing the test of time in a competitive industry is usually a mark of a company’s financial strength.

A financially strong insurer will be able to pay out large numbers of customer claims even in sudden disastrous circumstances. When insurers do not have the financial resources to process high-volume requests, this can lead to clients paying out of pocket.

3. Using the same insurance company for different needs

A good tip for saving money on house insurance is to look for carriers who provide bundle offers and give discounted rates to customers who purchase both their house and car insurance from them.

4. State insurance companies

Governmental insurance in New Zealand

Given that early colonial New Zealand was characterized by a lack of roads whereas shipwrecks and fires were common, it is no surprise that the insurance industry in the country grew rapidly. While the government originally set up firms to compete with private insurers, these have largely been privatized.

While public and private insurance both have their pros and cons, private insurance typically offers shorter processing times and a wider scope of coverage when it comes to home and contents insurance in New Zealand.

Currently, there is only one governmental insurance company in New Zealand. It is called State Insurance and it has been helping New Zealanders with their insurance for more than 100 years already.

Insurance sales agent

5. Insurance agent choice

What to consider when choosing an insurance agent

In order to choose the right insurance agent, you should consider the following things:

• Are they a direct agent working on behalf of one company or an independent agent?
• Do they have the technical knowledge and good credentials?
• Are they enthusiastic and friendly?

The trustworthiness of clients’ testimonials about agents

While client testimonials are a great resource for helping you find an agent, they are not always trustworthy. It is not uncommon for businesses to pay freelancers to leave positive reviews on their websites, but you should be able to identify fraudulent testimonials by keeping your wits about you online.

Saving money by choosing a professional insurance agent

A professional agent will not only offer you personalized attention and regular check-ins, but they will also explain how to estimate house insurance and help you save money by comparing all available insurance quotes and pointing out their benefits and drawbacks for you.

6. Asking for your insurance agent’s advice

Your ideal insurance agent will have your best interests at heart and, so, it is advisable to ask them how you can lower your insurance costs. To ensure you are getting the best deal, ask if you are getting all the discounts for which you qualify and do not hesitate to ask them to match or beat a lower rate if you find one.

7. Monitoring your agent’s work

Trusting your agent

Although you should aim to work with an honest agent, it is advisable to always be wary. It is not uncommon for problems to arise when it is time for insured homeowners to file a claim, finding out that they are not covered for a certain type of damage.

Checking your agent’s work

If you have reservations about your agent and need to put your mind at ease, you can monitor their work:

• Check their references.
• Ask them questions.
• Ensure that they comply with the law.

Online resources

8. Online insurance

Online house insurance

If you are familiar with the structural details of your home, you can buy house insurance online. There are plenty of insurance companies that offer an online service.

Buying house insurance online vs. offline: Which is cheaper?

How much does house insurance cost online? The truth is that, even though online insurance rates can be competitive, it is not always cheaper to buy house insurance online. Working physically with an insurance expert who knows your home can help you ensure you are covered for all possible circumstances, meaning it can save you money in the long run.

Buying house insurance online in New Zealand

To buy house insurance online in New Zealand, check out the following websites:

• AA Insurance
• Tower Insurance
• Cove Insurance

9. Online portals

Insurance comparison websites in New Zealand

If you want to conduct an insurance comparison in New Zealand, have a look at these websites:

• Money Hub
• Glimp
• Consumer.org

Likely damages

10. Considering insurance costs when buying a new home

The region where your house is situated can affect the insurance price because of risks such as the local crime rate and susceptibility to natural hazards. Typically, the higher the likelihood of these incidents in your region, the higher the insurance rates.

11. Disaster-prone areas

An area is defined as hazard-prone if the mortality risk there is higher than a certain threshold. This could be because of natural disasters, such as typhoons, wildfires, floods, and others.

Disasters covered by house insurance include earthquakes, floods, windstorms, rockslides, and lightning strikes.

12. Improving your home outside

Making your home more disaster-resistant

Making your home more disaster-resistant is a sure-fire way to save money on your insurance. There are many steps you can take to protect your house from extreme weather and natural hazards, from inexpensive solutions to more fundamental changes to the structure of your property.

Reinforcing the outer parts of your home

To ensure your house is disaster-proof, you should reinforce its outer parts. You can protect your windows with storm shutters. An impact-resistant roof goes a long way to protect your house from extreme natural phenomena. Heavy, metal doors are ideal for securing a home while bolting the house to its foundation by bracing walls with plywood helps stabilize walls.

Insurance discounts for owners of disaster-resistant homes

A disaster-resistant home means that it will incur minimal damages in the likelihood of a catastrophic event. This makes owners of these homes appealing clients for insurers, whom they reward with better rates.

13. Improving your home inside

Making your home safer by reinforcing its inner parts

To reduce the risk of fire and water damage to your home, you should reinforce its heating, plumbing, and electrical systems. You should always check appliances regularly and you can upgrade washing machine hoses and install water detection devices.

Insurance discounts for owners of well-equipped homes

If your home is well-equipped, it is unlikely to sustain major losses or damages, which is why insurers commonly offer discounts for owners of homes with safety equipment installed.

14. Securing your home

To make your home safer, you can install the following things:

• a smoke detector
• a burglar alarm
• good locks
• ample outdoor lighting
• security cameras

Better insurance prices for homes with safety and security equipment

Security equipment increases home safety, so insurance companies favour homeowners who have them by offering them better insurance rates.

Home insurance discounts

15. Discounts system

Getting all the discounts you qualify for

Insurance companies offer many different discounts and it is always worth checking to see which ones you qualify for. Insurers can offer discounts based on factors such as customer loyalty, whether you have other policies with them, whether you belong to a certain demographic, and others.

Discounts for specific groups of people

So how much is house and contents insurance if you are retired? Is it cheaper? The answer is yes! Insurance companies offer discounts based on whether you belong to a certain demographic, association, or profession. These may differ from company to company. If you think that you might qualify for a discount, don’t hesitate to ask your insurer about it.

16. Long-term relations with your insurer

Generally, it has been found that people stick with their insurance provider despite market changes. Some insurers reward long-term clients by offering them discounts for their loyalty.

17. Recommending your insurance company to other people

Insurers also offer discounts to clients who invite their friends, which is called a “referral”. Referrals are a cost-effective way to grow an insurance company and, so, they are often rewarded with better prices.

18. Informing your insurer about claim absence

Clients who have not filed a claim in many years are considered by insurers to be low-maintenance customers. As such, they are commonly offered discounts.

19. Extending the insurance period

In many cases, it is advisable to extend the insurance period for two or more years instead of having your house insured for the regular 12 months. The point is that many insurance companies offer discounts for longer periods.

Say, having your home insured for two years in advance will cost you less than having it insured for one year and then buying new insurance for the second year. In the first case, you are likely to get a discount for second-year insurance. Also remember that insurance prices tend to rise from year to year, which is another reason why long-term insurance can save you some money.

Taking such a decision is only appropriate in case you are planning to stay in the same house for the whole insurance period. Should you decide to move to another home before your insurance expires, it may be difficult (if not impossible) to get your money back.

Other

20. Maintaining a good credit history

How your credit history affects your insurance price

Are you wondering “how is house insurance calculated”? When calculating your insurance price, insurers take your credit score into account, among other things. Your financial history helps them determine whether you will be able to pay your premiums. The better your credit history, the better your chances for a reduced price.

How to improve your credit history

Improving your credit history is important and you can do it by:

• paying your bills on time
• paying off debt
• using credit cards sparingly

21. Separating house costs from land costs

Are you wondering how to value your house for insurance purposes? While you should be careful to not under-insure your property, it is not necessary to insure your house for the same amount you paid for it. The price you paid for your home includes the land it is on, which cannot be affected by a disastrous event.

22. Reading the declarations page & exclusions page carefully

The declarations page is the section of your policy which details what it covers. This is usually the front page of the document.

The exclusions page of your policy is the part that mentions what your policy does not cover.

It is crucial to read the exclusions page of your policy before signing, in order to not face any surprises when it is time to file a claim. Being unaware of one’s policies means a person can end up paying for repairs and damages out of pocket.

23. Reviewing your belongings regularly

It is important to review your belongings regularly because:

• Some items lose their value over time and are not worth insuring anymore.
• You may have purchased new valuable items that you would like to include in your policy.
• Some items may have been damaged under circumstances covered by your policy.

You should review your belongings once a year.

24. Business insurance

With more and more people working from home in the digital age, you may be wondering if you can extend your house and contents insurance in New Zealand to cover your business. In most cases, this is easily arrangeable.

Business equipment that is automatically covered by house insurance includes computers, printers, fax machines, and photocopiers. For more specialist items, such as expensive audio-visual equipment, you need to consult with your agent.

25. Setting reminders

Setting reminders about your insurance can help you stay on top of things. If you have not bought or paid for your insurance premiums on time, you could lose money in case of a disaster.

Find a good deal

The home insurance market in New Zealand is very competitive and there are many good deals available to homeowners. Before you choose your insurer, you should shop around and educate yourself about available discounts in order to make the wisest choice possible.

You can always trust a CGPM property manager to help you find a deserving rental property and guide you in the process of home insurance in New Zealand using their multi-year expertise. A CGPM property manager will be able to confidently solve any doubts you may have about the home value in New Zealand and answer questions like “What’s the value of my home in New Zealand?” and “What’s my house worth in New Zealand?”!

The post House Insurance in New Zealand: 25 Secret Tips That Will Save You Bags of Money appeared first on Clarke Group Property Management | Auckland Property Management.

Time to say goodbye

How to end a tenancy

It is not uncommon for a tenancy to not continue for various reasons, and landlords may find even themselves in a position where they wish to end it early.

As a general rule, landlords need to give their tenants a minimum of 90 days’ notice, which must be delivered officially, in written format. For a fixed-term tenancy agreements, between 21 and 90 days before the end of the fixed term, a landlord can give notice to say that they do not wish to continue the tenancy after the end date.

When the parties have a cooperative landlord-tenant relationship, they can mutually agree to end a tenancy early, in both a fixed-term or periodic agreement.

For advice on particularly difficult tenancies, it is best to consult with a professional property manager for the best course of action.

Difficulties faced when a tenant is leaving

Some common problems that landlords face when tenants are leaving are:

• Bond refund issues: Disputes can often arise between tenant-landlord when deductions have to be made from the tenant’s bond for cleaning fees or repairs.
• Failure of payment of past-due water bills: If a landlord neglects to monitor the payment of water bills that are in the tenant’s name before they leave, they may find themselves stuck with unpaid bills.
• Abandoned personal property: When tenants skip move-out inspections, landlords can find themselves with abandoned personal property that they must figure out a way to dispose of, which often strains a landlord-tenant relationship.

The final inspection: a bit of theory

The inventory/chattels list: what it is

An inventory/chattels list is a detailed list of every item within a property, which includes fixtures and fittings, cupboards, windows, doors, kitchen appliances, and furniture, and its condition.

This is a particularly important document that is often supported by photographs and which provides landlords with tangible evidence of the exact contents and condition of the property when a tenant first moves in.

How to check chattels

During the final inspection, a landlord must carefully tick off every item in the house against their chattels list. While it is possible to use a rental property management company for this purpose, which makes the job a lot easier, a lot of landlords choose to do it themselves.

In order to properly conduct the chattels check, landlords should inspect the property room by room. They should take notes and photographs, while checking things such as the integrity of the walls, ceiling, and floors, looking for any surface damage and stains. Landlords should compare the state of the property to the photographs attached to the chattels list created when the tenant first moved in.

Fair wear and tear

The term “fair wear and tear” refers to the unavoidable damage that happens through regular, day-to-day use of a property. A worn carpet from being walked on is a perfect example of normal wear and tear. A landlord cannot claim compensation from the tenant for anything that constitutes wear and tear. To avoid disputes on that, it is advisable for landlords to clearly have it stated in the lease agreement.

Wear and tear vs. damage: is there a difference?

Normal wear and tear is different than damage caused by tenants. While normal wear and tear occurs naturally over time, damage is a result of negligence, carelessness, or abuse. A carpet that has faded due to sunlight exposure would classify as wear and tear, whereas food and drink stains on a carpet are considered tenant-caused damage.

Landlords can use the tenants’ security deposit to pay for repairs necessary due to damage.

Calculating fair wear and tear

Calculating fair wear and tear can sometimes be challenging for landlords. Landlords should always try to do some research online for case studies that match their own situation in order to determine what is suitable to dispute and what is not.

When assessing wear and tear, landlords should take into consideration factors such as the length of the tenancy as well as the age of the property, which naturally impacts the condition of the property. Using the apportionment technique, which works by assigning a monetary value to items in the property, can be useful for landlords going through what can sometimes be a subjective process.

The final inspection: practice

The final inspection: Who should attend?

It is both within landlord rights (and obligations) and the right of a tenant to attend the final inspection. Ideally, the landlord and tenant should arrange a time that works for both of them in order to do the final property inspection together. It should take place after the tenant has moved all their belongings out and finished cleaning the property.

If a tenant cannot attend the final walkthrough, landlords should take as many photos as possible and send them to the tenant, along with any notes, if any issues become apparent. This will help to ensure there is no landlord-tenant conflict.

What to look for in a final walkthrough

1. Ceiling & Walls

The ceilings of a property can often be forgotten, but it is important that landlords check them for signs of water damage during a final inspection.

The walls should also be examined for peeling paint or wallpaper, cracks or stains. Walls can often be left with nail holes and discoloration once the tenants have removed their hanging decoration and electrical fixtures or appliances.

2. Flooring & Carpets

Landlords should look at the property’s flooring for discolorations on wood or carpet. It is important to move furniture out of the way to allow any damage or fading to show properly.

3. Windows & Blinds

During the final inspection, landlords should make sure all of the property’s windows and blinds are functional. Windows should open smoothly and any screens or blinds should work as intended.

4. Doors & Locks

Doors, just like windows, should open and close smoothly and landlords should verify that knobs, bells, locks, and other security systems work effectively.

5. Furniture & Mirrors

Furniture that is listed as part of the property’s inventory, which can include items large or small, from mirrors to paintings and sofas, should be clean and in the same condition that it was in when the tenants first moved in, save for normal wear and tear.

Dealing with tenants who leave their furniture behind

An unfortunately frequent occurrence that landlords have to deal with is when tenants leave their personal furniture and other possessions behind. Even if landlords do not have the storage for them, they are obliged by law to notify tenants that they are holding onto it until it is reclaimed.

If a tenant is unresponsive or fails to remove their items, landlords are entitled to dispose of the property as they see fit, i.e. by selling, donating, throwing it away, or keeping it.

6. Electricity

During the final inspection, landlords should ensure that everything is in order with the electricity in their property by checking plug sockets, ceiling and exhaust fans, and the circuit breaker. All light switches should be turned on and off to ensure they are working and outlets can be easily tested by plugging in a phone to see if it is charging or not.

7. Water

All of the property’s water fixtures should be tested by landlords during the final inspection. This includes all sinks and faucets, the toilet, the bath, shower, and even the toilet bowl, along with any irrigation systems. Landlords should ensure faucets turn on smoothly and have both hot and cold water. Toilets should flush properly and there should be no leaks.

8. Large & Small Household Appliances

Landlords should deal with large and small household appliances the same way as with furniture. Household appliances that come with the property and are listed in the inventory should all be there during the final inspection. The appliances should be clean and in good condition, save for normal wear and tear, and they should be tested.

9. Utensils

Any utensils that are listed in the chattels list as part of the property should also all be there during the final inspection. Even though it is time-consuming, landlords should take the time to properly count everything carefully to compare it against their inventory.

10. Heating

No matter the weather outside, landlords should test out the heating during the final walkthrough. All heating sources should be working properly with no problems.

11. Air Conditioner

Landlords are not required by law to provide air conditioning. However, air conditioning is generally considered by tenants to be a useful amenity, especially during the hot season.

If air conditioning goes out of order due to wear and tear, it is the landlord’s responsibility to fix or to replace it and to cover the costs. However, if the damage has been caused by the tenant’s neglectful behavior, then the tenant can either directly pay the service technician, or the corresponding sum gets deducted from the security deposit.

12. Food rests & Garbage

It is a good idea for landlords to check that the garbage disposal unit is working while inspecting the property – something which can be easily overlooked.

13. Garage

If the property has a garage, landlords should ensure its doors (and remote, if there is one) work, opening and closing easily.

14. Garden

The yard or garden is another area that can sometimes be overlooked when landlords find themselves busy checking a property’s interior. Any outdoor areas that come with property should be reasonably clear, with no shed tools or garden furniture left behind.

15. Cleaning

When landlords visit their property for the final walkthrough, all rooms should be evidently clean with no litter or debris. Cabinets and closets must have been emptied and the walls, ceilings, and floors wiped, while light and other fixtures should be in working order.

The final cleaning: Whose responsibility is it?

End of tenancy cleaning is a regularly disputed issue, albeit one that can be effectively solved by clear stipulations in the lease agreement. Tenants who are leaving must return a clean property to the landlord. It is up to and within the tenants’ rights if they choose to either do their own cleaning or use a cleaning service, but the expectation is for the landlord to receive the property in the condition it was handed in to the tenant.

A landlord can charge a tenant cleaning fees if the property has not been left in a hygienic state.

Charging for cleaning

One of the most common deductions from the security deposit by landlords is for cleaning when a tenant moves out. The amount that landlords charge for cleaning depends on the condition of the unit, as well as the size of the property, but generally ranges from $200 to $500. Additional services, such as carpet cleaning, are charged extra and not covered by a regular cleaning fee.

Be attentive and fair!

Tenants moving out from rental properties can be a time-consuming process for landlords, who must be prepared to do a final walk-through and inspection to assess the condition of the property and check for any damages. Landlords should aim to do the final inspection together with their tenants, so as to discuss any issues on the spot and avoid potential disputes.

Both parties should have copies of the chattels and inspection checklist during the final walk-through and be very meticulous in examining items while moving from room to room. Landlords should carefully check everything from the water fixtures to the condition of the yard, in order to determine if tenants will have to incur any costs for repairs or cleaning as necessary that will be deducted from their security deposit.

Since there is certainly a lot to ending a tenancy, landlords can make their lives easier by enlisting the help of a property rental management company. Don’t just ask yourself “What does a property management company do?” If you are looking for advice regarding the end of tenancies and how to deal with a tenant moving out or other property maintenance information, a CGPM property manager will be more than help. With multi-year expertise in the property rental management field and a long string of successful relationships with satisfied clients, CGPM can help you optimize your experience as a landlord while at the same time saving you time and money!

The post 15 Things to Check Before Your Tenant Leaves: A Visual Inspection Guide for Landlords appeared first on Clarke Group Property Management | Auckland Property Management.

Are you thinking about renting out a property? While it is true that rentals can offer a healthy profit, you should also be able aware of landlord expenses. Maintenance of the property, landlord travel expenses, and landlord insurance costs can all add up and make a dent in your profit. A property manager can be of great help when in doubt.

Rental Property Profitability

While rental property can bring a lot of profit, it is important to keep in mind that every property is different and succeeding as a landlord requires commitment, hard work and a certain set of skills. In New Zealand, rents have risen at almost double the rate of house prices across the country in the last two years, which is very promising in terms of the profitability of rental property for landlords.

How much profit a landlord should make

To determine how much a profit a landlord should make, they should take into consideration a range of factors such as the property’s rental rate against the market’s rental rates and its expenses. As a general rule, the higher the rental rates are in the market, the higher a landlord can set the rent on the property, allowing them to maximise their profit potential.

Good rates of return on rental properties

A good rate of return on a rental property is, as a rule of thumb, 7% or more. A profitable rental property is one that generates enough cash-flow to cover running costs, mortgage payments and other issues that may arise.

Utilities

Utilities are services that constitute the minimum requirements for modern living in a property.

The basic utilities

The basic utilities are considered to be the following:

• Electricity
• Gas
• Water

Depending on the type and location of the property, there can be other utilities included too, such as rubbish and recycling services, security alarm systems and telecommunications. i.e. a telephone line and the Internet.

Internet access

Even though in most countries Internet access is not considered a utility, in New Zealand it has been recognised as such. The country’s government stated that, since digital technologies are essential to New Zealand’s economy’s growth, broadband is as essential as electricity, water and gas and will constitute “the fourth utility”.

Paying for utilities

A dilemma that often troubles landlords is the issue of who should be responsible for paying the utilities: should it be the landlord or the tenant? A landlord can either take it upon themselves to cover utility bills or charge their tenants for them. Both approaches have advantages and disadvantages.

Apartments where utilities are included often draw a lot of interest from tenants. When landlords choose to cover utilities themselves, this is reflected in a higher rental price for the property and provides convenience for the tenants.

On the other hand, there is the risk that tenants may exceed reasonable usage of utility services, in which case it would be more cost-effective for landlords to have their tenants sort out utility bills.

In either case, the issue of utilities must be clearly addressed in the rental lease. The utilities clause on the lease should list all utilities and state whose responsibility they are along with a thorough explanation of exactly how payments should be made if responsibility falls on the tenant.

In New Zealand, it is usually the tenants who pay for the utilities so landlords do not need to preoccupy themselves with the payment of utilities dilemma.

Maintenance

Average maintenance costs for a rental property

The average maintenance cost for a rental property is $82 per month. It is estimated that, over a year, the average is just under $1000. However, it is important to note that every property has different needs and it is possible that some will require none at all.

Peak periods for maintenance are March and August, during which many new tenants tend to move in. The winter months are usually more maintenance-heavy as people spend more time indoors, resulting in more wear and tear.

Charging tenants for repairs of broken household appliances

Tenants have a responsibility to keep the rental property and the appliances that come with it in good condition. Most tenancy agreements will specifically state that if a problem was caused by the tenant, they will be charged for this.

Repairs are the responsibility of the one who is responsible for them. The landlord will expect to be reimbursed for repair costs of intentional damage and the amount is often taken out of the deposit when the tenant leaves if it hasn’t been paid back before that.

Replacing broken household appliances

Landlords must ensure all household appliances are in satisfactory working condition at all times. If an appliance breaks down through no fault of the tenant, then the landlord must promptly replace it or carry out repairs as necessary. It is prudent to include a clause in the tenancy agreement that specifically discusses the subject of repairs and replacement of appliances.

Broken windows

Landlords must ensure conditions are safe for their tenants. A broken window can compromise a property’s security and, therefore, should be dealt with swiftly. If a window breaks as a result of improper fitting or an accident, then it falls upon the landlord to fix it. However, if the tenant is found to be responsible for damage to a window, then, according to landlord rights, they will be charged for any repairs carried out.

Carpet cleaning

While a landlord must provide a hygienic and habitable living space for the tenant, it is up to the tenant to ensure it is kept in such a condition. Carpets, if well maintained, preserve their good condition for many years and should only need deep cleaning at the end of each tenancy, which is a cost covered by the landlord. However, if a tenant stains the carpet as a result of a reckless accident rather than normal wear and tear, they will be the ones to bear the cost of carpet cleaning.

Other maintenance landlord costs to consider

Other than broken household appliances, there are, of course, many other maintenance costs that landlords should be aware of. These include:

• Redecorating: Properties have to be updated along with the times and will need freshening up every few years.
• Cleaning costs: When a tenant moves out of a property there will be a certain amount of cleaning that needs to be done, made more challenging and expensive depending on whether the tenants were smokers or pet-owners.
• Gardening costs: Properties with gardens will need a gardener to maintain the landscape and ensure plants’ health.
• Swimming pool costs: A swimming pool requires regular maintenance and upkeep, which constitutes another cost for landlords.
• Safety checks: It is the landlord’s legal obligation to carry out yearly safety checks on gas and electrical appliances. Landlords must provide fire extinguishers and smoke detectors and follow correct health and safety procedures, which create additional costs.

Rental property tax

Paying taxes on rental income

If you are making income from a rental property, it must be declared in your annual tax return. As with other income, you can deduct expenses like rates, insurance, and maintenance.

Tax-free rental income

If you make less than NZ$4,000 a year including your rental income, you will not pay any tax.

Insurance

Rental property insurance for a landlord

Landlords need insurance that covers damage to their rental property. There are many different types of insurance available to landlords, with the most comprehensive ones covering not only damage caused by natural factors (such as an earthquake, for instance), but also tenant damage, vacancy periods and even specific furniture or other home items. The cost of rental property insurance varies depending on which type a landlord gets.

Costs covered by insurance

Insurance can come in very handy when landlords are faced with costs due to damages. Some examples of the costs that landlord insurance can cover are the following:

• Structural damage to property
• Fire
• Water damage caused by a flood or burst pipe
• Boiler breakdown
• Malicious damage caused by burglary or vandalism
• Rent arrears

Damage by tenants

There are some types of landlord insurance that do cover damage by tenants. However, it is important to remember that there are clauses to this coverage. If the damage is accidentally caused by tenants, insurance will usually cover this (for instance, if an item is destroyed in a fire). Insurance policies, however, will refuse to cover damage caused by regular wear and tear. There is also a cap to the amount that insurance policies will cover in any situation.

Loss of rental income

Loss of rental income insurance is an optional cover type that can be added to landlords’ insurance for a premium. It covers the income that a landlord would lose if their rental property became uninhabitable due to an insured event (such as a flood or fire).

Landlord-tenant conflict

Reasons for suing a landlord

While there are several reasons why a landlord-tenant relationship could sour and for which a tenant could want to sue their landlord, in New Zealand it is actually the Tenancy Tribunal that disputes get dealt by. Common issues that the Tenancy Tribunal handles are the following:

• Illegally keeping the security deposit: If a landlord is withholding return of a tenant’s deposit or if deductions have been made from the deposit that were not agreed upon in advance.
• The landlord refuses to reimburse the tenant for a repair: If a tenant covers the cost for a necessary repair affecting health and safety, it is illegal for the landlord to not reimburse them.
• Unit is uninhabitable: If a tenant does not have running water, the heat is not working in the winter or they have mold or lead paint hazard, they can file a lawsuit against the landlord.

Harassment

A landlord using aggressive methods to pressure or intimidate a tenant constitutes harassment. Actions such as shutting off a tenant’s utilities thus making the property uninhabitable, refusing to perform repairs and property maintenance, raising the rent, improper notice and verbal and physical threats are considered harassment.

Trespassing

Landlords are required by law to inform their tenants in advance if they are planning to drop into their property. Even if access to the property is necessary due to an emergency, they must contact the tenants and obtain their permission. Entering a property without being authorised to do so may result in a landlord being charged with trespassing.

Calling the health department on a landlord

Landlord responsibilities include keeping a rental property in a habitable condition. If there are health and safety issues in a rental property that were not caused by the tenant (such as problems with pests, mold or lack of running electricity and water) and have been addressed with the landlord to no avail, then a tenant has the right to notify the health department.

Suing a landlord for emotional distress

A tenant cannot sue their landlord for infliction of emotional distress, but they can turn to the Tenancy Tribunal to deal with the distress caused by harassment or conflict over uninhabitable rental conditions.

Staying without paying rent

A tenancy agreement should clearly state when and how rent should be paid. If rent is overdue based on the terms of the agreement, the landlord will notify the tenant in writing that they have 14 days to pay the rent. If a tenant is more than 21 days behind in rent, the landlord can apply to legally end the tenancy. In those cases, most tenants are evicted within 90 days.

Immediate Eviction

A landlord cannot evict a tenant immediately. According to New Zealand law, landlords must invoke a three strikes eviction policy against renters by giving two initial warnings followed by a 90-day notice period.

Property Management Companies

Managing your own rental property

While it is certainly possible for a landlord to manage a rental property by themselves, they must take into consideration that it involves a lot of work and a certain set of skills. Managing a rental property by yourself means taking the time to find the right tenants, conducting maintenance and repairs, dealing with complaints and handling legal issues. If you are invested in learning how to become a good landlord, then managing your own rental property could be a great decision for you.

Property manager fees: What is reasonable?

While every property maintenance company has its own fee structure, as a general rule, property management company fees range between 5 and 10 percent of the rent, which is very reasonable for the provision of full-service.

Reasons why you should hire a property manager

Hiring a property manager is definitely worth it if you do not wish to be a hands-on, full-time landlord. Some reasons why you should hire a property management company are the following:

• Property management companies offer great on-call property maintenance services and are available 24/7 for dealing with emergencies that involve heating, plumbing or electrical issues.
• Property managers maintain good records, tracking everything from repairs to rent payments.
• Property managers can represent you in court when it comes to any matter relating to your rental property, and they have excellent knowledge of rental legal issues.

CGPM property managers

If you are asking yourself “What does a property management company do?”, the answer is everything related to your rental property! CGPM is a leader in property management in New Zealand, managing 200 properties of their own, in addition to acting as agents for many landlords seeking a hands-off experience, ensuring their profits are optimised.

If you are also looking for a hassle-free property rental experience, you have come to the right place. With a property manager license, a CGPM manager can give you expert-level advice on your rental property right now!

The post The Expenses of Being a Landlord appeared first on Clarke Group Property Management | Auckland Property Management.