Buying an investment property is only part of the process. Making sure you’re giving your tenants a great place to live also plays a huge part in your success.
Part and parcel of being a property investor is being a landlord. And with that comes some responsibilities. While your tenants are helping furnish a comfortable retirement for you, you need to furnish (though not literally) a comfortable place for them to live.
So, thinking ahead to when you settle on your future investment property, what do you need to prepare for as a landlord to make sure your, and your tenant’s, experience is as positive as possible?
This is the regulation that has probably tripped up most property investors in recent years – especially if they had purchased an older home. With new regulations around insulation and heating requirements having come into effect, it’s important that you check that the home you’re buying is up to snuff, or at least understand what you’ll need to do to make sure it’s compliant.
The good news is that most new-build homes on the market today are healthy homes compliant. This means they have insulation where they need it and have a heating system that will keep the home toasty during winter.
Nosing through the homes listed on our website, you’ll notice that they’ll state that they are healthy homes compliant and that you’ll be provided with a 3rd party report upon settlement.
Which is great, as this will save you $200-$300 in costs for getting the report and gives you peace of mind that the property you’re buying won’t need any additional work completed before your tenants can move in.
Now while you’re not obligated to have your home fitted with curtains or blinds and certain chattels, having these in place is certainly better for the tenant, and better for you.
Not many Kiwis travel from home to home with curtains in tow – given the wide variety of window shapes and sizes, it would be madness to do so. And, knowing that most houses come with drapes or blinds as standard, a potential tenant could be put off by the lack of them in your home, no matter how nice and new it is otherwise.
This is another thing that’s taken care of when you buy through Momentum Realty. All listed properties come with blinds as part of the rent-ready package.
You’ll usually also find that many new build properties today will include a dishwasher as a chattel, and some will even include a washing/drying machine and EV chargers. While not a requirement they are a great value add for your tenant and help you attract a better level of tenant.
Just a quick note, a few things you are obligated to make sure your home has are:
Even with all the above – a great new property that’s going to attract great tenants, and a great property manager to take care of it all for you – you still want to take out landlord’s insurance to cover the big stuff. Depending on the property manager you go with, this may even be a requirement of the agreement.
This insurance covers not only major damage, potentially caused by ‘acts of god’ but can also protect you against major damage caused by your tenants, periods your property can’t be tenanted due to damage caused by natural disasters, or major damage caused by the tenants themselves.
Even if you have the best tenants in the world, accidents can happen, and having insurance in place is the best way to have peace of mind and help protect your investment.
While you may baulk at paying someone to manage your rental property – we’d argue that a good property manager is worth more than their weight in gold.
Alongside marketing the property, finding the perfect tenant, and doing regular inspections they’ll essentially take care of everything for you. From fielding any calls from your tenants, fixing minor issues, and taking care of all the bills. And, as part of their job is staying up to date with all the renting rules and regulations, they’ll make sure that your rental property remains compliant and advise you of any upgrades that you need to do to ensure you get good quality tenants.
Most of them also come with a zero-tolerance policy when it comes to late rent payments, which adds extra peace of mind when you know you’ve got mortgage payments due.
And, if required, your property manager will also ensure your tenants comply with any resident’s association or body corporate rules.
Another great benefit of an experienced property manager is helping you ensure you’re getting the best rental rate you can based on location and what the market is doing. They’ll also take care of increasing that rent each year as appropriate.
You’ll see that some of the properties listed on our website have a rental guarantee conditional upon you using their property management services. If the property you end up purchasing doesn’t have this clause, we can recommend fantastic property managers in your area to take care of your property and tenants for you.
Buying a new build property makes the process of ensuring your investment property is rent-ready a little bit easier, but it’s still good to be aware of what’s required and what your responsibilities are. Choosing a property that complies with all the regulations and comes with all the bells and whistles that make it a great place to live from day one takes some of that pressure off. Adding insurance and partnering with a professional property manager who’s there to take care of the details means you can enjoy the benefits that come with having an investment property without having to sweat the small stuff and know that you’re providing a great place to live for your tenants.
While property investment may seem simple from the outside, there’s a lot that goes into buying the right property and making sure you can hold it through the fluctuations of a property cycle. In this guide, you’ll find everything that you need to know about what makes property such a powerful investment option, and how to make sure you buy the right investment property to meet your financial goals.
Click here to download the New Zealand Property Investor Handbook by Momentum Realty.