Monthly Landlord Newsletters

Welcome back to the Propertyscouts monthly landlord newsletter, where we update you on all things New Zealand property market, investor insights, seasonal reminders, and more.

And so, we’ve reached the end of another year…

Before we get stuck into this edition of the newsletter, we’d like to apologise if the mere mention of Christmas triggers the uncomfortable realisation that you haven’t started your shopping yet - we can relate!

With Christmas right around the corner, 2024 will soon be knocking on the door. We’ve put in a special request for sunshine over the holiday period so it's time for you to dust off your togs and give the barbie a good scrub.

All jokes aside, we sincerely hope that you get to have a break and enjoy some special time with family and friends. Rest assured we’ll still be on deck taking care of your property and countless others right across NZ.  Being your property managers during 2023 has been an absolute pleasure and we look forward to continuing to be of service to you in 2024.  From all of us to all of you, have a safe and happy Christmas and New Year. 

What does a National/Act Coalition mean for Landlords?

As we step into a new era of governance, a Coalition Agreement between the National Party and the ACT Party has been released that outlines four significant changes in the rental market. So, what does it mean for landlords?

Firstly, landlords will regain the ability to issue “no-cause” 90-day eviction notices without citing a reason, a shift that some argue empowers property owners but raises concerns among tenant advocates. Additionally, the reduction in notice periods for tenants intending to leave a tenancy (to 21 days) and for landlords looking to move into or sell a property (to 42 days) should provide landlords with more operational flexibility.

The introduction of a "pet bond" is a noteworthy change allowing landlords to negotiate higher bonds for tenants with pets, aimed at addressing concerns about potential damages. While this move is seen as making rentals more pet-friendly, critics argue that the existing bond already covers such damages. 

Lastly, the coalition deal aims to increase mortgage interest deductibility on rental properties to 100% by 2025/26. Supporters suggest this change will encourage more landlords to enter the market, fostering competition and potentially stabilising rent increases.

The reactions to these changes are mixed, with tenant advocates expressing worry about the empowerment of landlords at the expense of renters. On the flip side, landlord advocates argue that these changes are necessary to tackle supply issues and strike a fair balance between the rights of landlords and tenants. The ongoing debate mirrors the broader tensions within the housing market, highlighting differing perspectives on the optimal approach to address challenges for both renters and landlords. The unfolding events will undoubtedly be interesting to keep an eye on, unveiling how things play out and which way the cookie crumbles in the relationship between landlords and renters.

An oldie but a goodie… Should you get a Christmas gift for your tenants?

Owning a rental property is akin to operating a small business and should be approached with a similar mindset. Much like businesses that engage positively throughout the year, it's common to exchange gifts as a gesture of goodwill. Exchanging gifts or gratitude not only strengthens the relationship but also lays the foundation for continued positive interactions. If your tenants have proven to be reliable and considerate, expressing appreciation through a gift is something you might like to consider. The value of the gift doesn't have to be extravagant - it’s the thought that counts the most after all. Including a handwritten card with any gift adds a thoughtful, personal touch. One thing we don’t recommend is offering a one-time rent reduction as it may be misinterpreted.

November 2023 Property Investor Insights by Tony Alexander

Stay informed with the latest property insights provided by Tony Alexander. Learn about the developments and trends shaping the New Zealand property market in November 2023.

• The percentage of investors seeking to make a property purchase has decreased among those planning to buy new properties, while there has been an increase in those opting for existing dwellings.
• The initial surge in the number of investors looking to sell to buy another property, which occurred immediately after the election, has diminished.
• Intentions to sell because of the 2021 tax changes, however, have remained low for the second month in a row.
• Landlords, on average, are targeting a 6% increase in rents in the coming year. 

The Latest Ask an Expert from Within the NZ Property Investor Magazine | December 2023

Question: "My rental property recently had the tenant vacate, and during the final inspection, I noticed a significant amount of adhesive stuck to the concrete floor in the double internal car garage. It turns out that the tenant installed garage carpet during their tenancy without seeking my permission. They removed the carpet upon leaving, claiming that the adhesive left behind is just 'fair wear and tear.' However, the remaining adhesive is unsightly, and it will require substantial labour to restore the concrete floor. Is it correct to consider this fair wear and tear?"

Answer: No, this situation does not fall under fair wear and tear. Installing garage carpet constitutes a "minor change," and tenants cannot renovate, alter, or add significant fixtures to the property without the landlord's consent, which should be in writing and not unreasonably withheld.

Your tenant failed to request your permission for the garage carpet installation, which is a breach of the RTA (section 42). Consequently, it's the tenant's responsibility to restore the area to its original condition before the minor change was made.

If the tenants haven't taken the necessary steps to reinstate the concrete floor to its pre-carpet state, you can apply to the Tenancy Tribunal for an order to cover the costs of restoring it.

How Technology Is Revolutionising the Way Property Viewings Are Conducted

In the ever-evolving landscape of property management, technology is reshaping the way viewings are conducted, offering efficiency and cost savings. Key trends include:

• Remote Viewings: Video and 3D virtual tours have become commonplace, allowing prospective tenants to have personalised viewings at their convenience through desktops, tablets, or smartphones. The future sees the potential for fully remote viewings using VR technology, enabling multiple viewings simultaneously and reducing travel time for property managers.
• Smart Lock Technology: Mobile-controlled smart locks provide flexibility and security, allowing owners and agents to manage access easily. This technology enhances property value and eliminates the need for traditional lockboxes.
• Automated Cleaning Systems: To address the aftermath of on-site viewings, property managers are considering automated cleaning systems like robot vacuums and mopping devices, streamlining the tidying process.
• Smart Home Systems: Digitisation and automation of smart home systems, including lighting, thermostats, and security cameras, enable personalised experiences for property managers, while offering future occupants’ comfort, savings, and security.

Check out our latest blog article ‘How Technology Is Revolutionising the Way Property Viewings Are Conducted‘ for more insights.

Rent prices rising faster than usual, but yields still low by past standards

Residential rental growth in New Zealand has surged to historically high levels, with rents increasing by 6.1 percent in the year to October, double the long-term average growth rate. The rise is attributed to a slowdown in purchasing activity by investor groups, leading to a shortage in rental supply amid increasing net migration. CoreLogic NZ's chief property economist, Kelvin Davidson, notes that only one in five property purchases are made by mortgaged investors due to higher deposit requirements, low rental yields, and a lack of mortgage interest deductibility. While national rental yields have improved to 3.2 percent, they remain relatively low compared to historical standards. Davidson suggests that the introduction of "property-friendly" policies by the government could encourage investor participation, but the overall property recovery is expected to be slow and patchy, influenced by challenges such as high mortgage rates and the ongoing review of debt-to-income ratios by the Reserve Bank.

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Quote to Ponder

"The only place where success comes before work is in the dictionary." - Vidal Sassoon

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Disclaimer

Given the opinions expressed in parts of the email, it’s important that we make it clear that the contents are opinions and observations and made in good faith. 

Propertyscouts NZ (2020) Limited, trading as Propertyscouts, and its associated parties (including directors, agents, employees, officers or otherwise) have attempted to provide   this information to the best of their ability but do not make any representations or warranties of any nature (intended or implied) as to the accuracy of the information on this communication. All recipients of this communication should conduct and rely on their own enquiries in relation to the information on this communication.

The information available on the properties listed for sale, rent or otherwise, has been obtained from the vendor or landlord of the property and the appropriate professional service providers. We do not and cannot verify or guarantee the accuracy of the information obtained in relation to the properties.

The information and/or materials available in this communication are intended to be general information only and may be changed at any time, without notice to you. The information and/or materials in this communication should not be relied on under any circumstances as a substitute for legal, financial, real estate, or other professional and/or expert advice. To the maximum extent permitted by law, Propertyscouts and its associated parties disclaim all liability, responsibility, and negligence for any direct or indirect loss or damage suffered by any person arising from the information and/or materials presented in this communication or any information and/or materials that arise from it.