If you’ve got an investment property that’s being rented out, you have two options: hire a property manager to look after it for you, or do the work yourself.
Property managers usually charge around 7%-9% +GST of the weekly rent, so for example if you charge $500 a week rent, an 8% charge will deduct about $40 from that each week.
That adds up to over $2,000 a year per property. And seeing as most weeks nothing seems to need to be done, you may be keen to give it a go yourself.
If so, here a quick (and by no means exhaustive) list of things you will need to know, do, and be ready for.
Know the rules
First things first, there are lots of rules a landlord has to know to ensure they are in line with tenancy laws.
The Residential Tenancies Act of 1986 is mandatory reading, but if you're in a hurry, a good list of what you must (and must not) do can be found on the Citizens Advice Bureau and Barfoot and Thompson websites, and a few of them include:
Give tenants 24 hours notice before doing any maintenance work
Give tenants 48 hours notice before routine inspections
Send the bond to Tenancy Services within 23 working days
Any rent increases must be given in writing at least 60 days prior
Plus you need to keep an eye on any new legislation that affects rental properties, such as the soon to be enforced new insulation requirements.
The advertising, vetting, and onboarding of new tenants is one of those jobs that is bigger than you may realise.
You will need to get photos done, research the market rent value, list the property on sites like TradeMe, take applicants through the property and/or hold open homes, interview them, and potentially do some background research as well (such as credit and reference checks).
Getting the right candidates is extremely important, as the wrong tenants can lead to more work for you down the line.
Once you have the right people you want to move into your rental, properly completing contracts and bond lodgings are essential. Failure to complete these will expose you to risk and potential losses.
Having good admin and record keeping skills is definitely a plus, as is easy access to scanners and printers.
If an issue arises like a burst pipe or broken dishwasher, you will be the tenant’s first port of call, no matter the time of day. Get used to having your mobile with you 24/7.
It is your job to do inspections (48 hours notice, maximum once a month) and organise any contractors to do any repairs on the property.
For day to day maintenance, it’s a mix of tenant and landlord responsibilities, for example the landlord maintains the trees and shrubs, but the tenant does the lawns.
See the Tenancy government website for more on who does what.
When things go wrong
Property managers can be a bit like insurance: you don’t really see the value until something goes wrong. And when an issue like unpaid rent, damage, or other disputes arise, property managers are experienced at settling issues (or, if it comes to it, evicting tenants) professionally.
However, if you are doing the management yourself, you have to be prepared to fight for what’s yours. These situations can be stressful and time consuming, and you may have to be the “bad guy” even if the law is on your side, so make sure you’ve got the mettle to do this.