FAQs for landlords
Renting out your home – Frequently Asked Questions
If you own an investment property and are considering renting it to tenants, you will likely have some questions as to what you can expect from a property management service.
There are many aspects of renting that a property manager takes care of. From screening prospective tenants to conducting inspections and rent reviews, through to keeping you up to date with the latest legislation and compliance required, there are many benefits to engaging the services of a property manager.
To help you on your way, we have compiled some of the most frequently asked questions by landlords. These will also give you an understanding of what it means to engage the services of a property manager – and how it can make your life easier!
What are the on-going fees?
The ongoing fees for having your property under management may include:
- The small percentage of the rent that the management company deducts weekly as their management fee. In New Zealand, property management services usually charge between 8-13% (+ GST) of the rent collected.
- Many companies charge a fee for finding tenants for a property, whether its vacant when they first take over the management, or if the property becomes vacant at a later stage, though this is often capped to a certain amount of charges per year
- The cost of any routine maintenance and repairs required. In New Zealand the average maintenance cost for a rental property amounts to about $82 per month* though this varies from house to house depending on its state of repair.
- Another on-going fee which is absolutely necessary, regardless of whether or not your rental is professionally managed, is landlord insurance
What are the one-off costs
· Marketing; Some property management companies may require you to pay start up fees or advertising costs when your property is initially listed for rent. Effective marketing will promote your property to the largest possible audience, so that the most suitable tenants can be selected.
· Healthy Homes Inspection; If your property does not comply with the current Healthy Homes Regulations to meet the minimum regulatory requirements, for example for heating, cooling or ventilation, you will need to invest money in bringing these things up to standard. Having a Healthy Homes assessment conducted by an inspector does incur a fee, but once the assessment is done you will know what remedial works are required (if any) and once your property complies, you can proceed with renting it out.
· Methamphetamine Testing; Meth tests can be conducted at the landlord’s request, or at the recommendation of the property management company. Conducting a meth test will incur a cost, normally around $200. If contamination is present, you may be covered by your landlord’s insurance.
How will my property be advertised if listed with EVES Rentals?
EVES Rentals has a dedicated website to advertise all available rental properties. If you list your rental property with EVES it will also be advertised on major property portals such as Trade Me and realestate.co.nz, providing the highest level of online exposure to prospective tenants.
In addition to the online portals, your property will also be included in our ‘daily rentals list’ which is available to prospective tenants in our EVES branches.
Window displays and signage will also be used to attract interest. Our property managers also maintain a database of prospective tenants who could be suitable to occupy your investment.
How do I cover myself for things like fire damage or meth use?
All landlords, regardless of whether or not their property is under professional management, should have landlord’s insurance. There are a variety of policies available for insurance. Some are basic policies covering standard issues like meth contamination and intentional or accidental damage, while comprehensive policies offer compensation for more unlikely issues like natural disasters, issues with retaining walls, gradual damage, and loss of rent.
My house is currently a building site. Can I still advertise it for rent?
You can advertise as long as the tenancy does not commence until all works are finished and any works done have obtained Council Compliance and appropriate consents.
What if my tenant stops paying?
If a tenant stops paying rent, the property manager can issue them a ‘notice to remedy’ if less than 21 days rent is owed. If more than 21 days of rent is owed, they can apply to the tenancy tribunal on your behalf for termination of the tenancy. They will also represent you at all hearings at the tenancy tribunal and keep you informed of any progress made.
In addition to these remedial steps, EVES Property Managers conduct rigorous reference and credit checks on potential tenants, which lessens the likelihood of issues arising.
What if a tenant’s damages cost more to repair than their bond?
If a tenant intentionally damages property they are liable for the full cost of repairing those damages, regardless of their bond amount.
If damages are the result of carelessness, and are not intentional, the tenant is liable to pay the landlords insurance excess or the equivalent of four weeks rent, whichever is the lesser amount.
How do I get assurance that they don’t have pets?
You can request that the property be advertised as not allowing pets. This should also be included in a clause in your tenancy agreement, otherwise it will not be enforceable. You are also legally allowed to ask if any of the people living at the property, not specified on the tenancy agreement (such as flatmates) own a pet. From that point on it is the responsibility of the property manager to monitor and enforce this.
If the tenants breach this rule, and it has been outlined explicitly in the tenancy agreement, then the property manager can issue a 14-day ‘notice to remedy.’ This advises the tenant of the breach to their agreement, and lets them know what they need to do to remedy the situation. If the issue hasn’t been resolved after 14 days, the property manager can apply to the tenancy tribunal to have the situation resolved.
Can I specify no smoking at the property?
Yes, the tenancy agreement can specify that no smoking is allowed inside the property. This should also be included in a clause in the tenancy agreement, to make it enforceable. Similarly to the above point regarding pets, if a tenant is found to have breached this then the property manager can issue a ‘notice to remedy.’
Can I specify no holes/hooks/nails in the walls?
The tenant’s obligations under the tenancy law prohibit them from making any alterations to the property without the written consent of the landlord.
However, under the new legislation, you also cannot refuse permission for minor alterations to be made to the property.
Is the tenant in charge of the lawn?
Yes, tenants are in charge of mowing the lawns and weeding the gardens. Landlords are in charge of pruning and maintaining trees.
Can I end the lease early?
There are some circumstances which allow a fixed term tenancy to be ended early. Tenancies can be ended if family violence or landlord assault has occurred.
Also, if a landlord and all tenants agree to ending a fixed term tenancy early, this can be arranged, though there may be fees owed to the landlord for the cost of advertising. There is also the option for tenants to assign the lease to someone else.
Instances of severe financial hardship may mean a landlord or tenant is able to terminate a fixed term lease early, however this would need to be reviewed by the tenancy tribunal.
How do I know how much rent to charge?
Your property manager will conduct an appraisal of your property and advise you on the appropriate rent, based on the current market and the condition of the property. In addition to this, property managers can conduct rent reviews to ensure that you are still receiving the best price for your property in the current market.
Who pays for the rates?
Any costs that the property would incur even if it was vacant are the landlord’s responsibility (unless otherwise specified in the tenancy agreement), this includes local and regional rates. Tenants are responsible for paying water usage rates.
If you would like more information on what our property managers can do for you, or if you have any other questions about property management and renting, please get in touch with our team today: https://www.evesrentals.co.nz/our-people
NB If you choose to become a landlord, we recommend reading the full rental agreement and contract, so you understand you’re rights. If there is something you aren’t comfortable with, or feel is missing, speak to your property manager. They can provide guidance on how to include additional clauses.