Wellington Propertyscouts

March 1st 2018 - Monthly Newsletter - 1st Mar 2018

Hi to all our landlords, is it just us or is Parliament providing some great entertainment at the moment. We have a new Prime Minister who just happens to be expecting, Bill decided to go off into the sunset resulting in a lollie scramble and Hon Simon Bridges has just been announced as leader (of the opposition). And has anyone seen Winston since the election? All we can say is watch this space!

Reform of Residential Tenancies Act (RTA) won’t include rent controls:  Speaking of Parliament, Phil Twyford has confirmed that he wants to see changes to the Residential Tenancies Act by the end of the year which will improve (in his view) tenant’s rights, but the proposed reforms won’t include rent controls, because, according to Twyford, rent controls force Landlords out of the market.  The bad news for Twyford which he doesn’t seem to have picked up on yet is that a lot of the other proposed changes to the Act are also causing some landlords concern and will see Landlords questioning their longevity in the rental market.  It’s a relief that at this stage anyway, the Government won’t be involving themselves in controlling the level of rent landlords receive for their properties.    

And on the subject of landlord’s longevity:  Yes some are thinking that it’s all getting a bit too hard.  But think about it this way – those landlords that ‘stay the course’ will end up being in the box seat.  Less landlord’s means less rental properties in an already tight rental market.  Landlords who stay in the market will achieve better market rents and have more choice when it comes to picking tenants.  And tenants will stay in good rentals for longer meaning better security for landlords.  And some of the proposed legislative changes will mean a more level playing field for landlords.  Those landlords who have always been prepared to maintain their properties at a reasonable level won’t be competing for tenants with sub-standard poorly maintained properties.  So, you see... it’s not all bad.       
Insulation:  Information we are receiving from insulation installers is that if all the rental properties that need their insulation upgraded before July 2019 (when it becomes law for all rental properties to be insulated) were to confirm the upgrade now, there wouldn’t be enough installers in the country to do the work.  This confirms what we have been saying all along about the issue of checking the level of insulation in rental properties.  If your property is likely to need its insulation upgraded, then please get in touch ASAP

Naughty Property Manager!  Bad property managers are bad property managers, whether they are part of a licenced real estate company or operate independently, as all of the Propertyscouts offices do.  All the landlords who had their properties managed by a property management franchise in Auckland are going to be out of pocket, according to a recent news report, because of the company’s owner putting the business into voluntary liquidation.  There’s no room for ‘fly-by-nighters’ in this industry but this case proves that investors don’t receive any additional protection by opting for a Property Manager operating under an REINZ licence.  It’s always been our view that property investors are better served by independent property management companies specialising solely in property management.   

What causes rents to increase?  Ask a tenant this question and invariably their reply will be that greedy landlords increase rents when there is a shortage of rental properties.  In some cases that might be true but in our experience landlords, and us as property managers, have a good understanding of the market forces at work.  Rent increases are applied fairly and consistently rather than large increases in rent from one year to the next. It’s rare, in our view, that rental shortages lead to wholesale rental increases.  It’s much more common and likely that rental increases stem from increased costs of rental property ownership.

Facebook:  If you are an active ‘facie’ then make the most of it by joining the Property Investors Chat Group NZ.  There are presently 12180 members in the group with lots of very good discussion about property investing in NZ.

Q:  Do tenancy agreements have to be in writing? 
A:  The simple answer to this question is NO, they don’t have to be in writing.  Section 13c of the Residential Tenancies Act states that tenancy agreements are not unenforceable on the grounds that they are not in writing. In the case of verbal agreements the problem arises with what exactly the parties have agreed to regarding the tenancy.  At Propertyscouts we have a very comprehensive tenancy agreement and would never enter into a tenancy based on a verbal agreement with a tenant.  Our tenancy agreement has come about because of a lot of legal ‘leg-work’. All of our tenancy agreements are in writing and are signed by the tenant/s after they have undergone a comprehensive tenancy induction.

Disclaimer:  Given the opinions expressed in parts of this email it’s important that we make it clear that the contents of this email are opinions and observations and made in good faith.  We suggest that in all cases independent legal and financial advice is sought. 

Regards from the hard-working team at Propertyscouts. 

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