Buying a property to rent out in New Zealand can be a good long-term investment. The first step to getting value for money is to purchase the right house. The second step is to engage a rental property management firm to protect your investment.
Choosing tenants, organising inspections, routine maintenance and repairs can all be handled by a property manager for a small fee, usually a percentage of the rental amount. Outsourcing this responsibility to a professional property manager means less stress for you and can save you money in the long term.
To get a property that will give you a good level of rental income and capital growth, you'll need to understand what will appeal to tenants - which may be very different from what appeals to you. For example, your perfect home may be a character rural property with limited amenities, but there may be limited demand from tenants for properties like this.
Tenants tend to prefer easy access to jobs and facilities. Begin your search for a great rental property by looking for areas and types of property that are in demand now and will become increasingly in demand in the future.
Factors to consider when choosing a good rental property:
- Rental income
- Job opportunities
- Insurance costs
Choosing the right neighbourhood is really important. Are there other rentals in the area? Are the homes in good condition? If an area has a large number of houses for sale it could be an indication of a problem with the area.
Ask yourself will your likely rental returns cover your mortgage, insurance (higher in areas prone to flooding for example) and other costs? An area with good local amenities and schools will attract long-term tenants, including families, especially if there is a low crime rate and good job opportunities.
Keeping your property tenanted is important to avoid loss of income during periods between tenants. The aim is to avoid high turnover of tenants by keeping the rent at market rates, not too high or low. Choosing a property that lets quickly can be a major advantage and they tend to have the following features:
- close to transport links, shops and parks
- updated kitchens and bathrooms
- plenty of storage
- good use of natural light
- garden (important for tenants with children especially if fenced)
- good security
Nine mistakes property investors commonly make when leasing a property without the support of a property manager:
1. Become too friendly with tenants
2. Don't run their property like a business
3. Neglect to make regular property inspections (increasing the risk of damage developing)
4. Fail to review and increase rent annually
5. Put family or friends in as their tenants who may take advantage
6. Charge too low a rent or don't keep property rented out
7. May inadvertently breach the tenancy act due to lack of knowledge
8. Don't plan for preventative maintenance and end up with costly/emergency repairs
9. Don't put a formal tenancy agreement in place
To help you avoid these common mistakes engage the services of a local property management team who are experienced rental managers in Wellington
. Manage My Rental is a company experienced in property management throughout the Wellington region.
Contact them via their website www.managemyrental.co.nz
to reduce your tenancy risks, maximise the return on your investment, save time, save money and be stress free!