Propertyscouts NZ Ltd
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October 2017 Propertyscouts Newsletter - 1st Nov 2017

October 2017 Propertyscouts Newsletter


Election 2017:  Well, we have a new Government.  Things could get ‘interesting’ for property investors once the dust has settled.  It seems like the new coalition Government will be wanting to re-introduce the healthy homes bill (which didn’t make it through Parliament last time) and they have indicated that they hope to have it implemented by the end of this year!  Remember - that’s the one that includes ensuring that all rental properties in NZ meet minimum standards of heating and insulation.  Other ‘initiatives’ this Government will probably look to introduce include rental property WOF’s, doing away with letting fees (that will just result in rent increases!) and landlords having to give a reason for not renewing a tenant’s lease.  As well, they are looking to extend the bright line test from 2 years to 5 years.  That means any profit from the sale of an investment property sold within 5 years of its purchase is taxable. 

And on the subject of rental WOF’s:  A Wellington Landlord’s property has failed to meet the Wellington City Council self-imposed rental property WOF standard.  The Landlord believes that the Council’s WOF scheme needs some work to make it practical.  He was reported as saying that his 7-year-old property failed to meet the required standard because some windows needed security stays fitted and his porch light wasn’t working.  Hopefully if this Government introduce a WOF scheme (and we think they will) they take a realistic approach and consider the difficulties some of our older properties may present in meeting unrealistic WOF standards.   

What drives and motivates property investors:  A recent survey revealed that capital gains are no longer seen as the biggest opportunity for residential property investors.  Most investors now consider a good rental return on investment to be the greater opportunity.  At Propertyscouts we do all we can to ensure that we achieve the best rent we can for all the properties we manage.  In doing that we have to consider the ‘market’ rent, age and condition of the property, time of year, time the property has been vacant, tenant application details – and the list goes on.  The one area where property owners can really help in this process is ensuring that property maintenance is kept well and truly up to date. 

State of the market:   With the election now behind us the rental market seems to be heating up.  Rents to date during the year have remained relatively flat but if we were to crystal ball gaze, our prediction would be for good rent growth over the next 12 to 18 months.  Here in Dunedin students are gearing up for their end of year exams so things are quiet on the student front.  Expect a mad panic and rush from them in about 3 weeks’ time when they realise they have nowhere to live next year!  Sadly, rent arrears have seemed to be more of an issue this year than previous years.  That’s indicative of the fact that there are people out there who are (or perceive that they are) having a hard time financially.  While we feel sorry for the genuine cases, the fact remains that tenants must pay their rent, so we initiate action against tenants as soon as we become aware of issues with their rent.  A lot of the time we are doing this in the ‘background’ as the rental guarantee we offer all our owners has protected them from what can be a very stressful situation. 

Property manager Vs self-managed rental property:  OK from the outset it’s clear that we have ‘skin in the game’ in terms of the professional property management option but given the recent changes in legislation the worm has really turned, and property management should no longer be an ad-hock DIY option.  Property management may look simple but there are a lot of components to it that need to be done 100% correctly.  The consequences of not getting it right can be huge. 


Q:  Can a landlord insert a clause into a tenancy agreement requiring that the carpets are professionally cleaned at the end of a tenancy? 

A:  Unfortunately no.  Tenants have an obligation to leave a property ‘reasonably’ clean and tidy at the end of a tenancy and this will dictate as to whether the carpets need additional (professional) cleaning.

Would you like free management of your rental property for 3 months?  Simply have any of your friends, relatives, work colleagues, etc. who have an investment property contact us and if they decide on to have us manage their property we will offer them a discounted management fee and we won’t charge you any management fees for three months.  How good is that! 

Next Disbursement:  Wednesday 15 November 2017.  Only 54 days until Christmas!

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.  

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