For Owners of Multi Income Rental Properties
August 5th 2019
Property management is a relationship between owner, management company and tenant. Maintaining the balance of rental income, tenant needs, maintenance, improvements and regulatory requirements for owners of multi-income properties requires a structured system and attention to detail.
In New Zealand the majority of rental property is owned by what are termed “mum and dad” investors, who typically own one or two properties purchased to secure their retirement.However if you are a serious investor, and have built up your portfolio over a number of years, you will likely have specific requirements as to what you expect from your investments.
There’s no right or wrong way to build your stable of rental property; you may have purchased a rental block and renovated for improvement, developed land behind an existing home, or added slow and steady.
But the one thing that is certain is that you want your properties to perform. Your rentals need to be increasing in capital value, yield, and overall attractiveness as an investment. Whether your focus is strong cash-flow or increasing capital, strategic investors understand the importance of quality tenancies, maximising return, and ongoing improvement.
A well-managed block will have good care taken of the common areas, and careful attention to the type of tenants placed in each rental. While tenants don’t have to be best mates, it’s important to understand for example potential conflict between young students who are in a party frame of mind, and families who want quiet surroundings while they’re getting children settled to bed. A property where tenants are chosen carefully and demonstrate a willingness to respect neighbours, will result in more stable tenancies and better long term profitability.
If this strikes a chord with you, Ruby Housing is the management company you need. With over 15 years owning and managing rental blocks and multi-income properties, my goal is to increase your financial return, mitigate your risks and assist you in meeting your investing goals.
You may be managing your rentals closely and ensuring all aspects are covered in a timely fashion; marketing, viewings, tenant selection, maintenance, rent management, inspections, bond filing, exit inspections, improvements, and regulatory compliance. However unless managing your rental properties is your main occupation, rather than a side-line, you won’t be able to dedicate enough to maximise gain and minimise problems. I have heard from many owners that they placed what they thought was a good tenant in a property, and didn’t realise for some months that the rent wasn’t being paid, the property was being damaged, and there were suspicious strangers living in the home. If this rings a bell, you need us!
In the majority of cases we are able to improve the profitability of rental property, by increasing rents, marketing to attract better quality tenants, more stringent application processes, having less damage and fewer vacancies, and working with you on improvements which will increase both the desirability of the rental as well as maximising capital growth.
What is your time worth? If your hourly rate is worth more than a coffee a day, then the small charge for management fees gains you so much more; no more interruptions to your work or weekend life, tax deductibility on expenses, easy to read inspections and remittance statements, and best of all, peace of mind. As one of our owners said “ the rent is paid, the house is looked after, we don’t have any late night calls or stress, why wouldn’t you sign with Ruby Housing?”
For a number of years the RTA and surrounding aspects of tenancy management were fairly static. However since 2015 alone there have been numerous changes in tenancy law and the tenancy landscape. The Osaki case resulted in a new Practice Note, which has been partially overturned; there are ongoing amendments to the RTA; meth damage and liability rules have changed; the Healthy Homes Standards, effective 1st July 2019 and 1st July 2021 must be met. All of these aspects have the potential for exemplary damages against the landlord, with large fines awarded to tenants. Add to this insurance providers changing their risk assessment, EQC cover changing, the Privacy Commission setting out new rules for assessing prospective tenants, and long years of experience just aren’t enough any more. Ruby Housing takes away all that tension of whether you’re meeting rental compliance, it’s our job to stay ahead of what is happening in the rental market, keep you informed, and mitigate your risks. At $4000 breach penalty directly against landlords, signing with Ruby Housing instead can save you a whole lot of money and stress.