First time property investor? What it takes to be a landlord
With the current rental market, we’re seeing mum and dad property investors pulling out of their property investments left, right and centre. This has to do with the uncertainty of how the market will move, as well as a lack of understanding and knowledge of how to adapt.
We are in a time where there are a lot of changes and additions to the rules in the industry and being a property investor or landlord is about more than just having the money to purchase an investment property. You have a duty of care to your tenants and need to understand the industry and any applicable legislation inside out. Otherwise, this can prove to be costly in the future.
So, what does it take to be a landlord?
It’s more than meeting legislative requirements
As a landlord you are required to take care of your tenants, your property, and anyone who visits/completes work on the property. It is essential that you not only understand all the laws that apply to you as a landlord and property investor, but also comply with your legal obligations. Making sure you meet and understand these can help in avoiding any problems during the tenancy.
There are a myriad of regulations governed by various organisations and enforcers including:
Keeping up to date with any amendments is vital, as you need to ensure your tenants are kept safe, and your investment is protected so it’s important that you also understand your rights as well as your responsibilities.
To ensure you are compliant and meeting your obligations, Tenancy Services have a Landlord compliance checklist that you can fill in.
It takes a village
Sometimes you just can’t do it all on your own. Being a landlord takes a team of people to ensure your property is a liveable, warm, healthy and profitable home. It’s important to have contacts who you can count own to help you out. It will save you a lot of time, energy and money. It is worthwhile having contacts prior to your first tenancy, you never know when you need a repair.
While you’re renting out your property, it is more than likely that there will be maintenance jobs or repairs that need completing. There is also the chance of an emergency repair such as a broken toilet, or smashed window.
In these times you need to be able to call up a trusted tradie who can get the job done fast and to a high standard and can do it safely.
Property investors association
Joining a local property investors association can be helpful for advice throughout your investment journey. Network with other investors and expand your knowledge on the industry.
As a property investor, a property manager is your best friend. If you’re not wanting to be entirely involved in the tenancy process, appointing a property manager is the best solution. Not only are they invested in protecting your property and looking after tenants, they are experienced in the industry and have contacts, knowledge and staff to handle any situation.
If you are a landlord and you’re planning on living outside of New Zealand or leaving the country for more than 21 consecutive days, you must appoint an agent in New Zealand. Having a local property manager in this situation means you will stay compliant, and your property will be looked after whilst you are outside of the country.
Purchasing an investment property is a different process than purchasing a home. It’s usually more difficult to borrow money for a rental property than it is for a home you’ll live in, and some lenders may have higher or lower lending limits than you might expect. Finding a mortgage broker who specialises in investment lending will help you on your way and help you to get it right.
Understanding of investments
Most importantly, you need to understand that all investments carry risk. Ensuring you have an investment timeframe and management plan is vital in maintaining it’s value.
There will always be changes to markets and updated legislation, particularly in rental properties, so it is important to completely understand the industry and the risks involved, as we are seeing people fleeing the market because they’re worried about the value of their investments.
If you’re looking at investing in property in Wellington, or turning your existing house into a rental, and you’re not quite sure where to start – contact Keith at email@example.com