Renting Rurally – Tank Water

Maintain Tank Water System

Not maintaining water tank systems and landlords failing to do this can cause a heap of trouble.

If you are renting a rural property you should provide a full tank (or at least near to) at the start of a tenancy.

The tenancy agreement should record that the tenant will arrange and pay for any refills.

Landlords need to provide adequate means for the collection and storage of water.

Maintaining the tank system leak-free and uncontaminated condition is essential to prevent water wastage and health risks.

Sometimes, landlords fail to:

🟢 Clean gutters regularly.

🟢 Check & clean filter inlets from collection plates where downpipes meet or at the tank.

🟢 At the house, failing to change exterior & interior filters when due for replacement.

This short video explains why you should.

TRANSCRIPT.

Failing to do this can cause a heap of trouble.

I had a situation with a rural property that was newly listed with new tenants, and they were complaining about the water.

So I checked out the tank’s source and what the collection was, and it was coming from quite a large woolshed, a plantation of pine trees at the back, and pine needles everywhere on the roof.

The gutters were full, and it was a mess. So we called in a tank specialist. What they did was they drained the tank, purified the water, and washed out the tank, and also why the water was getting purified.

They flushed and cleaned all the gutters, stored some gutter whiskers where needed, and got the whole system nice and clean.

Once the tank was completely clean and the water purified.

They put the water back in there, and we were good to go. The tenants noticed a huge difference right away. It wasn’t perfect, and it just needed fresh water to come in because it was a little discoloured.

But the tenants noticed a huge difference as soon as we did that.

So, today’s tip is to keep it from getting to that stage.

Check out your water systems and get them cleaned regularly. We’ll make a huge difference, making life easier for you and your tenants.

So I hope that helps. We’ll catch you next time.

Making life easier for landlords is what we do.

Carpets Professionally Cleaned at the End of Tenancy – Yes or No?

Carpets Professionally Cleaned at the End of Tenancy - Yes or No

So, do carpets need professional cleaning at the end of a tenancy?

What does the law mean by reasonably clean and tidy?

Check out this short video to find out the answer yes or no to the professional cleaning of carpets.

 

TRANSCRIPT

So, do carpets need professional cleaning at the end of a tenancy?

Section 40 of the Residential Tenancies Act—tenant’s responsibilities—states that tenants must leave the premises in reasonable clean and tidy condition.

What does the law mean reasonably clean and tidy?

Sometimes, determining what is reasonably clean and tidy can be difficult because we all have different living standards.

A vacate checklist with cleaning task reminders is a great tool to use.

So, back to carpets – if they are in the same condition as when tenants moved in, considering normal fair wear and tear, no stains, smells, or other issues, landlords can’t expect or make tenants commercially clean carpets.

You can’t write clauses into tenancy agreements that conflict with the Act. The Tenancy Tribunal may consider such clauses unenforceable, meaning they have no effect, and in some cases, these clauses may amount to an unlawful act.

Clauses likely to be unenforceable are clauses that:

  • Ask a tenant to do more than the Act requires them to do
  • Try to remove or reduce the tenant’s rights or give the landlord more rights
  • Evade the requirements of the Act.

Some tenants will view it as reasonable and agree to get the carpets professionally cleaned. Still, others will only view carpets as reasonably clean with a good vacuum.

So, ensure you know what you can and cannot do as a landlord regarding the ACT.

Deferred Maintenance Costs Landlords Money

Deferred Maintenance Costs Landlords Money

What is Deferred Maintenance?

The hidden cost of doing nothing

For landlords who defer maintenance long-term, it is like watching the money roll out the door.

Deferred maintenance refers to postponing essential upkeep tasks due to financial difficulties and or inadequate planning. This negligence can significantly affect a property’s condition and value over time, escalating minor repair needs into significant problems.

The widespread occurrence of deferred maintenance in real estate is concerning. Many property owners and managers face the dilemma of addressing immediate issues at the expense of long-term upkeep, resulting in a cycle of deterioration and neglect.

Preventative maintenance saves landlords money. It’s about fixing things before they break, worsen, or cause more damage.

Costs Increase Exponentially

This short video gives examples of how costs can increase exponentially.

1️⃣ Decreased Property Value

Deferred maintenance can lead to a noticeable decline in the property’s overall condition.

Issues such as peeling paint, leaky roofs, or outdated systems make a property less appealing to potential renters and decrease its market value. When it comes time to sell, properties in poor condition typically fetch lower prices, reducing potential profits for landlords.

2️⃣ Delaying Maintenance Increases The Costs

Minor issues not promptly addressed can escalate into major problems that are much more expensive. For example, an ignored small water leak can lead to significant water damage, mould growth, and structural issues. The cost of repairing extensive damage is often exponentially higher than addressing the problem when it first arises.

3️⃣ Tenant Turnover and Vacancy Rates

Happy tenants are more likely to stay longer and take better care of the property, reducing the costs associated with turnover and vacancies. Deferred Maintenance Costs Landlords Money

Regular maintenance signals tenants that the landlord cares about the property and their well-being, fostering a positive landlord-tenant relationship. Conversely, neglecting maintenance can lead to dissatisfaction, complaints, and a higher likelihood of tenants moving out.

Properties that are not well-maintained are less attractive to high-quality tenants, leading to higher vacancy rates and increased tenant turnover. Frequent turnover not only means more time and money spent on marketing the property and screening new tenants but also leads to lost rental income when the property is vacant.

Making life easier for landlords is our specialty.

How To Recognise a High-Performing Property Manager

How To Recognise a High Performing Property Manager

This short video explains key signs indicating you’re working with a first-class property manager and what to look for.

TRANSCRIPT

1️⃣ Select Great Tenants 

So first off, of course, select great tenants who look after your property and pay the rent on time—maintaining market rent.

2️⃣ Maintain Market Rent

Doing 12-month-a-year reviews gives the landlord options on what the market is doing. 

At the end of the day, it’s always the landlord’s choice whether to increase rent. But of course, rates and rents go up annually, and if there’s been a move in the market, it helps keep your cash flow coming in. 

3️⃣ Low Vacancies. 

The goal here is, ideally, long-term tenants. Now, some properties and locations are more transitional, which needs to be taken into account. Also, the market has ups and downs when you’re advertising.

 So if the market’s slow, it’s going to take a bit longer to rent, and you could have a time when the property is vacant. But the goal here is ideally a 100% occupancy rate and between 95% and 100%.

 Any lower, it starts to reduce your cash flow. 

4️⃣ Timely routine inspections.

Timely routine inspections and report any issues to you promptly. 

5️⃣ Repairs & Maintenance

Organising any repairs and maintenance quickly and efficiently. There’s ongoing communication with the landlord and a professional tenant relationship.

6️⃣ Reply to Inquiries in a Timely Fashion.

Also, reply to inquiries in a timely manner. That’s really important. It’s frustrating if a property manager is not getting back to you. 

Of course, property managers are busy, and they might text and say, Hey, look, I’m in the middle of something right now, but I’ll call you back tomorrow morning. 

But as long as they’re making that effort, and of course, depending on your inquiry’s urgency, this handle will be in a timely manner.

7️⃣ Ongoing Communication

Ongoing communication with the landlord and also conducting a professional tenant relationship.

8️⃣Fully Compliant Tenancy Agreements.

This includes sections dedicated to declaring smoke alarms on the property, including location, expiration dates, etc. 

The Healthy Homes Declaration describes what meets the standards and if something needs to be done, the timeline for that.

Also, protecting the landlords with clauses that have your interests at heart is very important. 

9️⃣ Legal and Property Management Training. 

Access to legal and property management training and upskilling to keep landlords safe. 

A good property manager will have someone on the legal side who can call for up-to-date information if needed.

Achieve Better Results – Introducing The EEL Formula

Achieve Better Results

For landlords wanting to achieve better results, the EEL formula offers a winning process for optimising your rental property outcomes.

Here’s a detailed breakdown of these three components.

1️⃣ Education:

The foundation of success lies in educating both yourself and your tenants. Continuous education is the key, from signing a new tenancy agreement, including the tenant induction, to receiving and sending out a vacate letter at the end of the tenancy. 

For example, there may be condensation issues, so explaining the significance of proper ventilation may be necessary, or what is reasonably clean & tidy. Ensuring clarity and understanding paves the way for smoother tenancy experiences.

2️⃣ Expectation:

What to expect

Clear communication of expectations is necessary and a source of security for landlords and tenants 

When tenants are well-informed about what is required of them throughout their tenancy, they feel more at ease and understand, fostering a far more harmonious landlord-tenant relationship. 

Whether it’s outlining the steps needed to recover their bond at the end of a tenancy or explaining the consequences and actions that will be taken for late rent payments, setting expectations upfront helps manage potential conflicts and promotes accountability.

3️⃣ Lead by Example:

As a landlord, your actions speak louder than words. Demonstrating a proactive and responsible approach sets a positive precedent and instils respect and trust in your tenants. Your leadership paves the way for a mutually respectful and harmonious landlord-tenant relationship.

Better Results

Incorporating Education, Expectation, and Leading by Example principles into your rental management can significantly enhance your rental outcomes and foster a mutually beneficial landlord-tenant relationship.

Remember the EEL Formula; here is a video as well.

Making life easier for landlords every day.

.

High Occupancy Rates Are Important

High Occupancy Rates

Maintaining high occupancy rates is number four in the series covering “Four Core Fundamentals of Property Management.”

So what are the advantages?

🟢 .Increased revenue

🟢 Financial stability 

 It reduces uncertainty and gives better cash flow management for the landlord.  

This short video explains why maintaining a high occupancy rate is so crucial to landlords.

TRANSCRIPT

The advantages are increased revenue and financial stability. It reduces uncertainty and gives the landlord better cash flow management.

With long-term tenants in place who look after the rental property, the overall condition of your property will generally improve compared to short-term tenants.

Long-term tenants are likelier to do more for a property, such as the gardens and the grounds. They feel secure and want to make the property their home.

Because there’s constant rent coming in, I find landlords are more willing to spend more money on maintenance, which means increased capital value.

So, for example, you have a tenant who has been renting your property for six years, and next door, property B, is similar to yours.

On average, the tenants stay 14 to 15 or 16 months. The difference means five tenants will move in and out while your tenant has lived next door. Now, both properties rent for 600 per week.

On average, property B has a one-week vacancy between reletting and getting new tenants in.

So, hypothetically, there’s an income loss of $3,000 over that six-year period.

Now, if there were an average of two weeks of downtime between tenants, the loss of income would be $6,000. But it doesn’t stop there. You’ve got costs for letting the property between tenants and a risk of more wear and tear with tenants moving in and out.

And there’s also a risk of selecting the wrong tenants, particularly in a rental market downturn. So make sure you’re looking after those long-term tenants.

Making life easier for landlords is our specialty.

Why Do Twelve Monthly Rent Reviews?

Optimising Your Rental Return

Twelve monthly rent reviews are part three of the video series covering “Four Core Fundamentals of Property Management.”

So why do annual rent reviews?

1️⃣ Own a rental property; you are running a business.
2️⃣ Cash flow is king.
3️⃣ Avoid large rent increases.
4️⃣Fair to all parties. 

The short video explains why twelve monthly rent reviews are a must.

TRANSCRIPT

If you own a rental property, you’re running a business, and cash flow is king in any business.

Unless you’re in a really good position, have owned the property for a long time, and have significantly reduced debt, you need that cash flow coming in.

You’ve got insurance costs that go up every year. You’ve got rates that go up every year. You’ve got to be covering for repairs and maintenance. And on your loan, if interest rates go up, you must cover that.

So, it’s really important to keep that cash flow coming in, as you want to avoid large rent increases.

I’d suggest, even if you’re in a position where you don’t have to increase the rent, increase it slightly in a smaller increment rather than waiting three, four, or five years.

Then something happens, and you may have to adjust those rents and bring them up to market rent. That’s not fair on your tenant, either.

That’s a huge jump for them. Also, you could have three or four houses in a multiple dwelling and, say, two-bedroom units or something similar.

And you’ve got one tenant who just moved in at market rent.

Next door, you’ve got a tenant who’s been there three, four, or five years. They might have only had one increase in rent at that time. That’s not fair to both parties, either.

Market rent is the amount a landlord might reasonably expect to receive, and a tenant might reasonably expect to pay for a tenant’s. The rent must be comparable to the type of property.

So, if it’s a three-bedroom, one-bath home, you must compare apples with apples in similar suburbs and streets. Now, if the market rent hasn’t increased, and when, don’t increase it. That’s not fair or reasonable, either.

Making life easier for landlords is what we do.

Why Do Regular Routine Inspections?

Why Do Regular Routine Inspections?

So, what are the advantages of doing regular routine inspections?

1️⃣ Maintenance issues and early detection.
2️⃣ Maintain and add value.
3️⃣ Minimise damage.
4️⃣ Insurance requirements.
5️⃣ Tenant safety.
6️⃣ Tenant’s responsibilities.
8️⃣ Maintaining tenant satisfaction.
8️⃣ Opportunity for communication.
9️⃣ Property compliance.

The short video explains the reasons for and the benefits of conducting routine inspections on a regular basis.

TRANSCRIPT

I often talk about four core fundamentals of property management.

Routine inspections are the second core fundamental and essential part of looking after a rental property.

So what are the advantages?

Maintenance issues and early detection can save you money, but, of course, get onto before it causes much more damage.

For example, quite often, water leaks can be significant. When doing routine inspections, checking under sinks, checking bathrooms under the basin, around the waste pipe, the elbow, etc., make sure there are no leaks because they can be gradual but, over time, can cause major problems.

Also, check the hot water cylinders; they are not leaking.

It could be things like the leaves, grass, and debris in the gutters, which need to be cleaned to prevent them from overflowing. Water can also enter bargeboards, soffits and cause damage.

Number two is to maintain and add value. Again, when you’re doing inspections. For example you can see if the exterior windows that might need painting, and then you can plan and budget for that.

It might not need to be done tomorrow, but by planning that, you can add value to your property. You might see a garden that needs easy care, like putting stone or bark down, and you’re adding value to your property with minimal cost.

Minimising damage is number three. You can minimise damage by doing inspections quite often. When new tenants move in, they have an office chair with wheels.

You’ve got good carpet, particularly the thicker carpet, and the roller wheels on the office chair will run backwards and forward on that carpet, stretching and pulling it, permanently damaging it. When you’re doing an inspection, you can see something that could be an issue and could cause damage before it does.

Some insurance companies stipulate that someone must do inspections every three months. So it’s important to adhere to that.

Tenant safety is another one. When your tenants move in, you must check that the property is safe from health and safety measure.

But something could happen. A wooden step coming up to a deck might need a board replaced, or the decking or a decking rail might need replacing. Someone could go through and cause harm to themselves. So get on to those things.

Number six is tenant responsibilities. So you’re making sure they’re looking after the property, keeping the house and grounds reasonably clean and tidy, and also making sure that whatever’s on the tenancy agreement, the number of people that occupy the property is correct.

All those types of things make sure there are no breaches of any sort.  But tenant selection, if you’ve done that well, we talk about tenant selection in other videos; that won’t be an issue.

Maintaining tenant satisfaction.

Again, if there’s a tenant repair request, get onto it because that’s important. You can address that with them right then and there. What’s the issue? Talk about it. See if it’s a fair and reasonable request, and then decide what you will do.

And, of course, the opportunity to communicate with your tenant could be something going on in their life. They could be losing their job. They could be worried that two or three weeks from now, they may not be able to pay the rent.

So, conversing with them can be very helpful, and they will appreciate it. It will also help you because you will know what’s happening and can establish a plan.  So That’s important as well. Remember, tenants are customers.

And the last one is property compliance. It could be smoke alarms, ensuring they’re all present on the property. Meeting and checking Healthy Homes: you need to be meeting that when a tenant moves in, but just checking that it still meets those standards by, for example, guttering is loose or a downpipe has fallen off.

Well, that needs to meet the standard.

So, you must comply with health and safety, healthy homes, and smoke alarms.

Trees Overhanging Your Rental Property?

Trees Overhanging Your Rental Property?

This short video discusses the problems that trees overhanging a house can cause:

➡️ Mould & dampness.
➡️ Breaks down paintwork.
➡️ Dark and dingy with a lack of light.
➡️ Blocked gutters.
➡️ Roof leaks. 
➡️ Tree roots that uplift driveways & house foundations.

TRANSCRIPT

I love trees but don’t like them when they hang over your rental property.

I wouldn’t say I’m a tree hugger, but I love trees, gardens, and lovely grounds. It looks great. And I’m not a gardener, but my wife’s a great gardener.

Palmerston North is known for its well-established streets with trees aligned down the streets and properties with established grounds and gardens, and it looks fantastic.

However, trees next to a house and overhanging over a home can block gutters and cause mould and dampness issues.

When gutters aren’t cleaned regularly, roof leaks can occur, and the house can become dark and dingy.

It would help if you got those trees pruned the branches right back, so it lets the light in, and in some cases, it’s best to take out a tree.

I don’t know why people don’t deal with this more frequently, but I see it far too often when trees branch overhang the roof, and it’s not good.

Another issue can be with root systems and trees. If you’ve got a tree, say 15 or 20 metres in height, the roots will grow at least that length underground, if not more.

You may have seen roots uplift concrete driveways. It’s rare, but they can also uplift the foundations of houses. So get rid of these trees or prune them up.

I don’t like trees beside a house, but I love trees.

Tenant Selection – The Key To A Successful Rental

Tenant Selection Is The Key

I often discuss the four core fundamentals of property management.

Yes, they are all essential keys to running a successful rental property.  However, tenant selection is number one because everything else stems from this.

This short video discusses why tenant selection is the key to a successful rental.

TRANSCRIPT

In previous blogs, I’ve discussed four key fundamentals of property management.

And indeed, they’re all important, but tenant selection is a vital aspect of property management.

You absolutely need sound systems and processes to do your due diligence when selecting tenants for your property.

You get it wrong; it’s not good.

These days, ending a tenancy is not easy, so having great systems and processes in place is critical.

If your selection process is sound, you will eliminate ongoing tenant problems, i.e.  

🟢 Late rent payments or ongoing rent arrears.

🟢 Damage to your property.

 Untidy tenants who deteriorate your property over time.

🟢 Noisy tenants who disturb neighbours with loud music.

🟢Not to mention illicit drugs and all sorts of other issues.

Getting this right is like setting the foundations down properly when building a house. Everything else stems from this.

Mastering the craft of choosing ideal tenants and maintaining consistent accuracy is a skill honed only over time with training and experience.