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September 2017 Landlord news - 1st Sep 2017

September 2017 Landlord news

Rental property WOF schemes:  The suggestion of voluntary Warrants of Fitness (WOF) for rental properties are not new.  Recently, and especially leading up to this year’s elections, there has been in increase in the ‘chatter’ around the idea.  Wellington City Council has announced that it will be introducing a voluntary WOF scheme for rental properties, and previous commentary from Dunedin mayor Dave Cull suggests that he is also an advocate of such schemes.  The idea of rental WOF schemes seems to be to encourage landlords to improve and focus on areas of dwellings that have the greatest chance of improving the occupant’s health -   The likes of heating, ventilation, insulation, sanitation etc.  Landlord advocates aren’t impressed with the idea of WOF schemes, believing that they will just add more bureaucracy and costs.  Here at Propertyscouts we are in two minds about WOF schemes.  On the one hand they may encourage some landlords to do that little bit extra to their rental properties to make them better places for tenants to live in. The other side of the coin is that we’ve seen many instances of tenants living in rental properties that have adequate heating and ventilation systems, and would likely meet the criteria of a WOF but the tenants are unwilling to use them because of the additional cost.  As the old saying goes – ‘you can lead a horse to water …’

In any case, depending on the result of this year’s election Landlords may not have any choice on WOF schemes.  Watch this space!

Buying versus renting:  MBIE recently released figures showing that renting is more affordable than buying both nationally and in Auckland.  While that doesn’t bode so well for first home buyers trying to get on the property ladder its good news for landlords as it suggests that rental properties will remain in high demand across the country.  Added to that is the fact that new migration data returns show continuing record high migration numbers.         

Residential Tenancies Amendment Bill (No 2):  Nick Smiths bill passed its first reading in July and is now at the Select Committee stage. The Bill came about as a result of the Osaki case which made it very hard to hold tenants accountable for damage they caused to a rental property, along with concerns arounds meth contamination.  However the Human Rights Commission have slammed the Bill saying that it could put a higher duty of care on tenants, compared to landlords and had the potential to drive up the cost of renting. 

The Commission needs to get its head out of the sand.  All the Bill is trying to do is hold tenants to account and restore the situation back to the status-quo which existed before the Osaki case. 

Reserve Bank LVR:  The Reserve Bank’s loan to value ratio (LVR) appears to be hurting investors more than first home buyers, recent figures tend to suggest.  Lending to first home buyers has been up year-on-year but it’s in the area of lending to investors that the figures are down substantially, indicating an exodus from the market by investors.  And don’t expect a change of heart from the Reserve Bank anytime soon.  Economists say that it’s unlikely the Reserve Bank will lift the restrictions anytime soon.

FAQ:

Q:  Does my rental property have to be fully insulated? 

A:  No at this stage.  It is not compulsory for a rental property to be insulated until 2019.  However all new tenancy agreements must now state what parts of the property are insulated (if at all) and the type and quality of that insulation – R values.  By June 2019 all rental properties must be fully insulated to the minimum standards, both under floor and in the ceiling, provided those areas can be accessed.

Insulation reminder:  2019 is just around the corner and the one thing you can pretty much guarantee if your rental is not fully insulated by the time its compulsory then it will probably cost you twice as much.  Get in and get it done now before the price rises.

New Property Manager:  We’ve decided to address the gender imbalance here at Propertyscouts Dunedin and are proud to announce the appointment of Athol Murray as our latest Property Manager.  Athol is currently undergoing induction and training and soon he’ll be hitting the ground running.  He comes from a background in aviation security so we will probably have to remind him not to check the contents of tenant’s suitcases during entry and routine inspections!  

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