Investment Property Palmerston North – Six Common Costly Landlord Mistakes.

Six Common Costly Landlord Mistakes.

What Are The Six Common Costly Landlord Mistakes?

Over the years, I’ve noticed these six common landlord mistakes keep occurring when landlords manage their property themselves.

And, in some instances, unfortunately, when using a property manager who is not acting professionally.

 1. Avoid making “friends” with your tenants. Treat them like your best customer.

Investing in property is a business; it is best to develop and maintain a professional “business” relationship with your tenants instead of a “personal” one.

That way, it is easier to keep emotions intact; this will ensure that you act in a responsible professional manner at all times.

Your tenants will respect you more when you treat them as “customers”.         .

2. Not keeping your property well maintained.

Where possible, do not defer repairs and maintenance; get it done regularly; that way keeping the property in good condition will prevent any reduction in value and ensure that the property is tenantable at the best weekly rental.

When getting work done, please use tradies with a proven history, reliable and trustworthy that do a good job.

Often I see landlords trying to cut costs by employing someone that is not competent and doesn’t do the job to a high standard which can cost the landlord more money in the long run.

3.  Ignoring Tenant Communications, especially requests for repairs & maintenance that interrupt their daily living.

Nothing is more frustrating from a tenant’s perspective than been ignored, especially when they have concerns relating to genuine maintenance issues that affect their day-to-day lives.

Sometimes these issues are minor and can be attended to with minimal cost or fuss.

At times it will not be appropriate to undertake what the tenant has asked if you’re not going to fulfil the tenant’s requests; it’s important to communicate this to them promptly.

4. Avoid being disorganised

Some landlords do not use a system, choosing instead to make do with a mass of unfiled paper which records their rents collected and expenses. It is essential to use a system that records rents collected and paid to dates, at the very least.

To optimise your investment property activity and ensure all legitimate costs are captured and offset where possible, you need a reliable system that is very thorough and records all the information for each property in a clear format.

If you don’t like been involved in the day to day overseeing of your property, it’s better to engage the services of a competent property manager rather than do a half-hearted job.

Are you aware that it is an unlawful act not to keep accurate records?

 5. Failing to do regular Property Inspections

Regular property inspections can save you money. When you inspect regularly, you can see how the tenant affects your property and if you need to take any action regarding this.

You can record the condition of the property and the appliances and make informed repairs and maintenance decisions.

Six monthly inspections or more prolonged periods can mean that damage or costly repairs may occur, which could have been avoided or minimised with more frequent inspections.

6. Love Property but Hate Managing it?

It takes a great deal of knowledge, skill, experience and dedication day in day out to be a competent self-managing landlord.

If you don’t have the time or inkling to become proficiently skilled yourself, it’s best to acknowledge this quickly and get professional help.

If any of this resonated with you and you would like some help, let’s meet for a coffee and a chat call 027 249 8295 to see if we make a good fit

Or email if you have any questions

All Ways Property Management is here to grow your Palmerston North Investment Property Returns with no fuss.

Call Richard on 027 249 8295 today.’

Rental Property Management Palmerston North

Rental Property Management Palmerston North

The market for rental properties in Palmerston North & surrounding areas is still in high demand.

Are you keeping up with market rent in your region/suburb?

Landlords have been hit severally by the Government in the last couple of years or so.

With healthy home regulations, bright-line tax, and interest on loans as a deductible tax claim acquired before 27 March 2021 being phased out over four years, property investors will begin paying more tax on their rental income.

The below scenarios show how some landlords maybe losing substantial cash flow and how to increase it.

Case Scenario - Self-Managed

A busy couple did not bother keeping up with the market rent on their rental property.

They thought they might upset the tenants, and if they did increase the rent, the tenants might leave.

They were good tenants, and it was better to leave things as they are. Besides, the couple worked full time, and it all seemed too hard to keep up with the market rent on their property.

Let alone keeping up with repairs and maintenance and other tenancy issues.

The market rent for the three-bedroom Palmerston North rental property was $500 per week. 

However, the current tenants who had lived at the premises for four years were paying $430 a week in rent. $70 below the market rent adds up to a significant amount of money over a year.

Multiply that by fifty-two weeks; there’s a rent loss of $3640.00.

The tenants are unlikely to leave in a hurry because they know they are on a good thing, and the landlord will lose on potential profits.

If the landlord’s kept up this tactic, not keeping up or close to market rent over five years.

The loss of return would be $18,000 or so over five years and ten years could likely be more than $36,000; this money could have been in the landlord’s pocket.

Case Scenario - Professional Property Manager 

This Palmerston North couple understood the power of leverage; having looked after their rentals properties in the past, they knew they did not have the time to do it properly.

Knowing what was involved, they would prefer to leave their properties in the skilled hands of an experienced full-time professional property manager who kept up to date with current legislation.

The property manager did timely rent reviews after researching the market and with discussion with the landlords that felt fair and reasonable to them and tenants.

A yearly rent increase was processed, optimising their return on investment.

All other facets of management were carried out effectively and efficiently by the property manager, including repairs and maintenance, routine inspections and property compliance with healthy home standards.

What is Market rent? Check out this blog

Are you losing money on your investment property?

Let’s meet for a coffee and a chat – call 027 249 8295 today’ to see if we make a good fit.

All Ways Property Management is here to grow your investment property returns with no fuss.

Rental Appraisal Palmerston North – Free, Prompt, Clear-Cut

rental-appraisal

It is prudent to employ an experienced property manager to do a rental appraisal that includes thorough market research.

What Is Market Rent?

Market rent is the amount a landlord might reasonably expect to receive and a tenant might reasonably expect to pay for a tenancy. The rent must be comparable to your property type with other rental properties in similar suburbs and streets.

Before advertising a property to rent or reviewing an annual rent increase, it’s essential to do market research that accurately assesses the rental market and compares apples to apples.

If a landlord charges significantly higher rent than the market rent, a tenant can apply to the Tenancy Tribunal to ask for a rent reduction.

What Drives The Rent Market?

➡ Supply & demand generally drives the rental market. In short supply, rents go up, and rents will hold or drop in an oversupply of rental properties on the market.

➡ It pays to keep a close eye on the market when rentals are in high demand, as is the case in Palmerston North and the surrounding areas at the time of writing this blog.

Local Knowledge & Expertise

Having local knowledge of surrounding suburbs is essential. Price your property too low, and you will miss out on higher returns.

Price your property too high, and you may find you have much less interest from prospective tenants and take alot longer to rent.

It can be challenging and frustrating sometimes to find the right balance, which is why an experienced property manager can help advise on setting the right rent to ask.

That attracts prospective tenants and, at the same time, provides you with a better overall return on your investment property.

Market Rent Tenancy Services (from bonds collected)

Rental Appraisal

🔵 An accurate rental appraisal involves comparing similar properties currently advertised online and researching historical data and market insights online, such as tenancy services and real estate.co.nz.

🔵 Combining this with local knowledge of the area gives property investors and homeowners a professional opinion on what their property might rent for in the current market.

🔵 If you want to expand your investment portfolio, a rental appraisal can help you gain insight into the potential returns of properties you may be considering purchasing. Likewise, if your property is coming up for rent or isn’t providing the returns, you would expect we can assist.

Free Rental Appraisal

Contact us for a free, prompt rental appraisal, Call Today’  0272498295

Property Management Palmerston North: Get A Bigger Bang For Your Buck.

Property Management Fees Service

If you are a property investor, you are running a business. Any profitable business relies on keeping costs down.

Property investor need to understand the service level they will receive for their money before engaging a property management company.

Landlords owning residential rentals often find it challenging to choose a credible property manager they trust.  Finding a property manager with experience and expertise who constantly achieves first-rate returns for their clients is crucial.

The value of employing an experienced, reliable, comprehensive property management service allows you to benefit from reduced maintenance costs, decreasing vacancies and rental arrears while maximising your financial return.

Landlords should be wary of making their decisions on property managers based on fees alone; more importantly, is your overall return at the end of the year and how much the property manager will make you as opposed to just the fee itself.

Great property managers have the following skillsets and procedures in place.

➡ Skills and knowledge of the local area and a deep understanding of how to market your rental property, effectively exposing it to the maximum number of potential tenants.
➡ Set the rent at an appropriate level to ensure the property leases quickly while at the same time maximising the return for the landlord
➡  A comprehensive tenant selection procedure that secures honest & trustworthy tenants who will pay rent on time and look after your property.
➡ Adhere to the Residential Tenancy Act’s legal obligations that protect your interests, including compliance with the Healthy Homes Standards & Health & Safety.
➡ Have outstanding communication skills, including clear expectations and induction processes, particularly at the start of new tenancies.

It’s important to find a property manager who has the competency levels you need rather than the lowest property management fees.

When you are meeting property managers, focus on their professionalism. Take the time to find out how they handle arrears, inspections and rent reviews and most importantly, tenant selection.

 It’s also essential to get an idea of the property management company’s current rent roll to ensure you find a property manager that understands your local area.

Has the experience and understanding of the properties and tenants that match your properties type and location.

Any profitable business relies on reducing risk.

By wisely choosing a competent management company, your property manager will have had specialist training in the Residential Tenancies Act.

If a problem occurred the firm will have access to a tenancy law specialist a phone call away.

They will take more photos than is usually necessary; they will always document chattels, will advertise the property for rent well in advance of the current tenants leaving, so you don’t suffer the loss of rents.

Importantly they will have the time to communicate with you so you can feel comfortable that your highly valued asset is always carefully looked after.

If this article resonated with you and you want more bang for your buck, then let’s meet for a coffee and a chat; there’s no obligation.

To get in touch – drop me an email at richard@allwaysproperty.co.nz or call 027 249 8295

PS. All Ways Property Management is here to grow your investment property returns with minimum fuss