Preparing to rent out your property? Here are 7 invaluable tips to help you make sure you select the right tenants; your property is well looked after; and you maximise your return on investment
- REFERENCE CHECK
Always ask prospective tenants for references and always call the referees. Many private landlords rely on their assessment of prospective tenants rather than asking them to provide references, but this approach can leave you open to problems down the track.
- CREDIT CHECK
Referees may be reluctant to make negative comments about a friend, so it’s vital that you also perform a credit check on prospective tenants. One off credit checks can be made by most collection agencies, but you need the tenant’s permission first
- TAKE PHOTOS OF YOUR PROPERTY
Remember to give the tenants copies of the photos and ask them in writing to contact you if they believe the photos are inaccurate. If you don’t do this then the photos will be worthless. Your property will be better looked after and the bond can be used to pay for any cleaning that may be deemed necessary under the Residential Tenancy Act. If disputes go to the Tenancy Tribunal, good photos showing the condition of the property prior to occupancy will help you win the case. You can make huge savings on wear and tear, reduce redecoration time (and therefore maximise rental income) and minimise time spent involved in disputes, by extensively photographically recording your property’s condition before the tenants move in.
- CLEARLY OUTLINE YOUR EXPECTATIONS IN THE TENANCY AGREEMENT
Failure to make specific conditions clear can lead to a dispute and if the matter goes to Tenancy Tribunal, an unclear agreement puts you in a precarious position. Also be aware that neither party can sign away their rights under the Residential Tenancies Act. Even if both parties agree to a clause at the time of signing tenancy agreement, this clause may not be upheld if a dispute is taken to the Tribunal.
The tenancy agreement is the place to outline what you expect from your tenants. The agreement must clearly state if there are to be no pets, parties or smoking, the maximum number of occupancy etc.
- OPT FOR A FIXED TERM TENANCY OVER A PERIODIC TENANCY
A fixed term tenancy, on the other hand, enables you to find new tenants before the current tenants move out; potentially saving you thousands. It also enables you to protect against the property becoming vacant at a time of year when tenanting is difficult, such as late November / December or in mid-winter.
You may have a good tenant who is going to pay the rent and look after your property, but if you sign them on a periodic tenancy instead of a fixed term tenancy, they could leave with just 21 days’ notice. This gives you very little time to find a new tenant and creates an unnecessarily long vacancy, costing you loss of rent.
- TAKE THE MAXIMUM BOND
After meeting prospective tenants and being impressed by their appearance, many private landlords feel that only 2 weeks bond is necessary. But it is very easy for tenants to get in arrears and the process to fix this is likely to be way longer than 2 weeks, potentially leaving the owner out of pocket for thousands of dollars.
Given that the tenant is being given the right to live in an asset worth hundreds of thousands of dollars you should always insist on taking the maximum bond possible- 4 weeks
- LODGE THE BOND WITH THE DEPARTMENT OF BUILDING AND HOUSING
Always lodge the bond. Not lodging the bond with the Department of building and housing is illegal, and means that you could face a fine of up to $2000 if a tenant takes you to tribunal. The actual amount is at the discretion of the Adjudicator but you could also lose many hours dealing with the tenant.
- EXPERTS IN PROPERTY CARE AND RETURN
- REFERENCE CHECK
The experienced, approachable team at Quinovic Merivale is committed to providing the best property management team possible. With the backing of Quinovic’s excellent care and return system, developed over 25 years in residential property management, they’ll help you to avoid the pitfalls of residential property investment while maximising your returns .For an obligation-free rental appraisal or to discuss the management of your residential property please call 03 3550348 or visit www.quinovc-merivale.co.nz