Propertyscouts New Plymouth

Propertyscouts' monthly newsletter - 3rd Nov 2017

Election 2017:  Well, we have a new Government. Things could get ‘interesting’ for property investors once the dust has settled. It seems like the new coalition Government will be wanting to re-introduce the Healthy Homes Bill (which didn’t make it through Parliament last time) and they have indicated that they hope to have it implemented by the end of this year! Remember? That’s the one that includes ensuring that all rental properties in NZ meet minimum standards of heating and insulation. 

Other ‘initiatives’ this Government will probably look to introduce include rental property WOF’s, doing away with letting fees (that will just result in rent increases!) and landlords having to give a reason for not renewing a tenant’s lease. As well, they are looking to extend the bright line test from 2 years to 5 years. That means any profit from the sale of an investment property sold within 5 years of its purchase is taxable. 

And on the subject of rental WOF’s:  A Wellington Landlord’s property has failed to meet the Wellington City Council self-imposed rental property WOF standard. The Landlord believes that the Council’s WOF scheme needs some work to make it practical. He was reported as saying that his 7-year old property failed to meet the required standard because some windows needed security stays fitted and his porch light wasn’t working. Hopefully if this Government introduce a WOF scheme (and we think they will), they take a realistic approach and consider the difficulties some of our older properties may present in meeting unrealistic WOF standards.  

What drives and motivates property investors:  A recent survey revealed that capital gains are no longer seen as the biggest opportunity for residential property investors. Most investors now consider a good rental return on investment to be the greater opportunity. At Propertyscouts we do all we can to ensure that we achieve the best rent we can for all the properties we manage. In doing that we have to consider the ‘market’ rent, age and condition of the property, time of year, time the property has been vacant, tenant application details etc. The one area where property owners can really help in this process is ensuring that property maintenance is kept well and truly up to date.  

State of the market:   With the election now behind us, the rental market seems to be heating up. Rents to date during the year have remained relatively flat but if we were to crystal ball-gaze, our prediction would be for good rent growth over the next 12 to 18 months.

Demand for houses in Taranaki has increased more than 20% in the past 12 months, the third biggest increase nationally, according to statistics released by realestate.co.nz website. Only the West Coast and Southland recorded higher demand for houses. The number of houses offered for sale in Taranaki had dropped 15% since October last year, the website reported. However, high demand for houses, and low listings, may be down to seasonal variations with many would-be vendors holding off putting their houses on the market until spring, Real Estate Institute of New Zealand Taranaki ambassador Gary Malcolm said.

Property manager Vs self-managed rental property:  OK, from the outset it’s clear that we have ‘skin in the game’ in terms of the professional property management option but given the recent changes in legislation, the worm has really turned. Property management should no longer be an ad-hock DIY option. Property management may look simple but there are a lot of components to it that need to be done 100% correctly. The consequences of not getting it right can be huge. 

FAQ:

Q:  Can a landlord insert a clause into a tenancy agreement requiring that the carpets are professionally cleaned at the end of a tenancy? 

A:  Unfortunately no. Tenants have an obligation to leave a property ‘reasonably’ clean and tidy at the end of a tenancy and this will dictate as to whether the carpets need additional (professional) cleaning.

Would you like free management of your rental property for 3 months?  Simply have any of your friends, relatives, work colleagues, etc. who have an investment property contact us and if they decide to have us manage their property we will offer them a discounted management fee and we won’t charge you any management fees for three months. How good is that?  

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