I've tried to be a good landlord, but the rent isn’t covering the property costs anymore. What can I do? Do I have to sell my investment?

When you’ve put a lot of time, care and money into your rental investment, it can be disheartening to have financial pressure impacting on your long term plans. Before you make the decision to sell-up, take the time to consider other options. 

1. Is the property being let at current market rates? Most areas of Christchurch have seen increases over the past year, and your home may be sitting well below average. If it is 12 months or more since the tenants moved in, or since the last rent increase, it’s time to look at this. If you’re not sure what your property should rent for, ask Kim Willems at Ruby Housing for an updated rental appraisal.
2. Keeping good quality long- term tenants is essential to increase the ROI. Most investors plan for 2-3 weeks of vacancy per year. This is a direct loss which can’t then be recouped. Each extra year your tenants stay increases your financial return, which is why choosing the right tenants at the start is so crucial.  
3. Talk to your mortgage broker about a review of your lending. If you signed your mortgage loan more than a couple of years ago, a broker can give you the best independent advice about the loan structure and rates. If you’re experiencing real financial pressure, your broker may suggest asking for a short period of interest-only payments. 
4. Phone around for insurance quotes. Even if you don’t move to another insurer, your current provider might give you a better deal if they know you’re considering this. 
5. While repairs and maintenance are just part of the territory when owning a property, focusing on small changes with a big impact will increase the appeal  and rental price when the next vacancy comes up. 
6. Are there minor/medium changes tenants have asked for that could increase the income? Perhaps the tenants want a work-from-home cabin in the backyard, solar panels, or they’d now like to have a dog at the property. As long as it’s not something that is part of Healthy Homes or the usual repairs and maintenance, it is reasonable to negotiate increased rent if tenants are asking for an add-on for their own benefit. 
7. Is there room on the property to add a minor dwelling which can be rented separately? While this has a large financial outlay, in the long-term it may increase the return and value enough to make it worth holding on to the property. 

If you’d like to find out more, call Kim Willems at Ruby Housing today 03-379 5033.