The Guide to Screening a Tenant
Securing the best investment property is the first step in your investment success; the next key factor in a successful investment property is finding the right tenant. The right tenant can ensure regular rental income and a hassle-free process overall. However, the wrong tenant can lead to investment property nightmares that are stressful, expensive and time-consuming.
With the best property management services in Auckland, the team at Walker Weir know a thing or two about finding the right tenant. Here is our advice on screening a tenant to ensure rental property success.
It All Starts with High-Quality Advertising and Marketing
In order to find a qualified tenant, you need to attract a range of responsible residents to live in your property. A focused, local advertising and marketing campaign is the key to attracting prospective tenants.
The advertising for your property should reflect its benefits and be driven by a knowledge of the local community and its demographics. This allows you to attract an appropriate initial group of interested tenants, making it easier to make a great choice.
Things to Look for When Screening Your Tenants
From the initial group of enquirers, you can then begin to narrow down the tenants based on a range of desirable traits. Things to look for include:
- Tenants who thoroughly complete the application
- Proof of identification and income
- Adequate references from employers and previous landlords
- A documented history of paying rent on time, being a good neighbour and earning enough income
- Sound reasons for why they are leaving their current home
- Tenants who are willing to pay above the indicated rate
Walker Weir’s Rent Tender Process
Walker Weir Property Management implements an innovative rent tender system that helps landlords to find the most suitable tenant who is willing to pay the highest price possible. Under this system, prospective tenants place bids based on an indicated price and the highest bids from the most qualified tenants are accepted. This ensures the most rental income possible without compromising the quality of your tenants.
Signing on the Dotted Line
Following a thorough screening process, signing the tenancy agreement and all other relevant documentation is also important. This confirms that all the rights and responsibilities of each party are understood, as well as the potential consequences. A bond can also be collected from the tenant at this point.
Property management tools and resources can be invaluable at this point, as they help to protect the interests of all parties involved and conveniently store important information and documents for landlords. Secure cloud-based software that is easily accessible can give you peace of mind that nothing slips through the cracks.
Ongoing Property Inspections
Tenant selection is really an ongoing and active process that is reinforced by property inspections. Entry and exit inspections with detailed photography and videos can ensure that a property remains in the agreed condition for the life of the lease. Equally, routine inspections can keep a close eye on the condition of the property to ensure everyone is living up to their responsibilities.
Have the Whole Process Taken Care of for You
Most landlords don’t have access to specialist tools, affordable marketing and legal contracts, let alone the time or knowledge it takes to actively select and manage a tenant. Property management services from Walker Weir Property Management can handle the entire tenant experience for you in Auckland.
From marketing to regular inspections and bond collection, we do it all. To make your property management easier, phone 09 972 1212 or visit us online for more details.March 15th, 2018
When most people think of investing in properties, they picture the financial freedom and passive income that comes with investments. While it’s true that property investments can be profit-generating machines, they can also be black holes for your time and money, leaving you with a number of issues.
People don’t talk about investment property nightmares, but it’s important to understand the mistakes you could make and how to avoid them. To put you on the road to financial freedom with property investment, learn more about avoiding these common problems.
The Nightmare Tenant
Perhaps the most common property investment nightmare, a bad tenant can range from someone who doesn’t pay their rent on time to someone who physically destroys your property. Most of the time, bad tenants get into properties because of poor screening processes and a desire to avoid high vacancy periods.
While low vacancy periods are important, placing quality tenants in your property is, too. This doesn’t always mean the highest paying tenant, either, although price is definitely important. It’s essential to do research into a tenant’s rental history, looking at things like their past behaviour and ability to pay rent on time.
A fully-equipped property management service is essential in this process, as professional property managers will have the tools, expertise and time to find the right tenant for your property.
The Horrors of Mispriced Rental Properties
An incorrectly priced rental investment property might not seem too dire at first, but this can have far-reaching consequences for property investors.
For properties that are under-priced, investors are obviously getting far less rental income than they deserve based on market rates. Investors often forget that real estate isn’t an instant solution to their financial goals, with costs including maintenance, renovation and marketing to worry about, too. When coupled with an underperforming property, your earning potential can be seriously diminished.
Overpriced rental properties may seem like a dream come true, but this is often the reason investors can’t attract or retain quality tenants, leading to high vacancy periods that eat into their funds. A balanced approach to property pricing will extract the highest rental income and the best-suited tenant, meaning your property is never under or overpriced.
Due Diligence Disasters
The desire to get into the property market can sometimes lead investors to make impulsive decisions. At other times, an investor simply won’t know what to look for or how to look for it. Both of these scenarios compromise your due diligence and can leave you stuck with expensive mistakes.
For example, investors who don’t have professional inspections performed on a property could end up with a leaky property, an investment that has been exposed to drugs, or a property that is otherwise dilapidated. Due diligence also applies financially, and investors should know exactly what they’re getting involved in, especially in more complicated circumstances such as off-the-plan purchases or body corporate properties.
The Key to Avoiding Investment Nightmares
Avoiding investment nightmares is as simple as doing thorough research and recruiting a professional wherever you have a knowledge gap – however big or small. For example, when searching for an investment loan, consider talking to a mortgage broker. When it comes to managing your property and your tenants, rely on expert residential property management experts.
Walker Weir is Auckland’s property management professionals, offering local, personalised and comprehensive services for landlords. From tenant selection to advertising and inspections, we will work to maximise your income. For more information, call 09 972 1212 or visit our team online.
March 1st, 2018
There are many elements that will contribute to the success of your rental property, but choosing the right property manager is arguably the most important. Property managers are there for you whether you’re time poor, unsure of the property market or you just want to make your investment journey easier. But what should you look for in a property manager? Here’s our advice.
Locality Is the Key
The investment property landscape changes so much from region to region, so a local property manager is the key to success. That means local to where your investment property is, as you might not be investing in your own area.
Having local specialists on your side will make it easier to find the right tenants, as they understand the demographics of your neighbourhood. As well as this, they can offer tailored advice about when to raise the rent and other crucial decisions. Apart from this, local property managers simply make more sense from a practical point of view. Having a property manager almost on your doorstep will make them more responsive to your requests as well as the requests of your tenants – and a happy tenant is a long-term tenant!
Making the Switch Should Be Easy
The Auckland property market is highly competitive, so it shouldn’t be a surprise to property managers that you want the best service. With that in mind, investors should look for a property manager that makes switching to their services easy. A property management team may be excellent, but if it’s expensive and time-consuming to switch to their service then it may not be worthwhile. In many cases, smaller property management companies will have the agility and understanding to make the switch easy for you.
Pricing Your Property Correctly
Pricing your property correctly is essential to rental investment success and your property manager should be able to help you with this. It doesn’t matter how unique or desirable your property is – if it’s not priced correctly you will either be losing money through low rental income or a lack of interest.
Innovative approaches like Walker Weir’s Rent Tender system allows tenants to bid on your property based on an indicated price, with the highest and best-suited tenant being accepted. This ensures you’re receiving the most rental income possible without overpricing and scaring away tenants.
Can They Offer ‘Rent Income Guarantees’?
This is a major benefit but it’s worth going for the best when it comes to property management. A ‘Rent Income Guarantee’ would see the property manager pay the rent for a specified period if there are rental arrears during a tenancy. Not only is this a great guarantee, but it reflects the confidence of a property management company in their own service.
Based in Auckland, Walker Weir Property Management is the only company in the area to offer a ‘Rent Income Guarantee’. To learn more about this service and why you should choose us for your Auckland property management, call 09 972 1212 or contact us online today.February 1st, 2018
Buying an investment property with a partner can be a fantastic way to step onto the property ladder and start reaping the benefits of investing. Whether you are out-priced in the Auckland property market or you’re simply time-poor, an investment partner can open new doors and solve your problems. This could be a romantic partner, a relative, a friend or even someone you don’t know very well.
When you choose to enter into a property investment partnership, it’s absolutely essential to get the ownership structure right. From tax minimisation to conflict resolution, the structure you choose will shape the very nature of your partnership.
Here is some advice for investors looking to buy a property with a partner.
What Are the Advantages of Investing with a Partner?
There are several clear advantages of investing in property with a partner, which is why it’s becoming an increasingly popular option. By pooling your collective funds, you and your partner could get access to a more desirable asset class that would otherwise be out of your reach.
Similarly, a partnership could pair an investor with access to equity (and therefore a deposit) with a partner who has a greater cash flow. Finally, if one of the investors is time-poor, their partner could complete most of the hands-on investing duties alongside a property management service. In other cases, a partnership simply makes the most sense, such as when family members wish to buy property from a deceased loved one’s estate.
As you can see, there are situations where a partnership may be the best approach, and in these cases, it’s essential to protect the rights of each investor.
Joint Tenancy vs. Tenants in Common
Perhaps the simplest solution for investment partnerships is to put the property under both individuals’ names. In these cases, “joint tenancy” and “tenants in common” are the main investment structures. Joint tenants each own an equal share of the property while tenants in common can split the investment unevenly.
Tenancy in common is very popular for tax purposes, as it allows the investors to split their investment in a way that will be the most tax-effective (based on who has the higher income). As a tenant in common, you only receive your share of the profits and you only have to cover your share of any losses.
As the more flexible structure, tenants in common can also sell part, or all, of their share. For joint tenants, neither party technically owns a defined share and the remaining share will go to the surviving individual if one investor were to pass away.
Other Investment Options
As well as purchasing your property as individuals, there are several other avenues that investment partners could explore:
- Purchase under a trust – setting up a trust is usually recommended for rental properties that will make a profit. Trusts are an excellent way to protect your asset and they offer tax advantages by dividing the rental profit strategically or paying the trust tax rate. However, trusts can be costly and time-consuming to set-up and maintain.
- Look-Through Company – a look-through company or LTC is an investment structure where profits and losses are distributed based on the number of shares owned in a property. This is another way for investors to flexibly invest in a property.
Whatever You Do, Consider a Partnership Agreement
A partnership agreement can be written up with a lawyer in order to settle disputes should they occur. These documents can outline the rights and responsibilities of each partner, including their right to exit or dissolve the relationship, financial responsibilities, and the best methods for resolving disputes.
Choose Expert Property Management for Your Investment Partnership
Regardless of the logistics of your partnership, a professional, local property management service remains essential to investment success. This is especially true in markets as dynamic and complex as Auckland. Walker Weir Property Management ensures quality tenants and maximum ROI for your investment.
January 20th, 2018
It may not be obvious at first, but investing in real estate is actually all about relationships. There is the relationship between your property and your location, the relationship between the government and your investment, and then there is the most important one: the three-way relationship between the landlord, the property manager and the tenant.
If this is an effective relationship, it will have benefits for everyone: the tenant will have a great place to live, the landlord will have regular rental income and the property manager will have happy clients on both sides. However, when this relationship goes wrong, it can affect the viability of your entire investment.
Here’s some more information about this investment relationship and how you can get it right.
The Landlord and the Tenant
From a purely financial perspective, a tenant is a landlord’s source of rental income, the steady supply of money that can hopefully result in a cash-flow positive investment.
However, beyond the numbers alone, the landlord and the tenant can have a lot more to do with each other, especially if you’re taking care of rental property management yourself. The very act of having a tenant involves:
- Finding an appropriate tenant – including advertising, interviewing tenants, performing background checks and signing a residential tenancy agreement
- Dealing with financial matters – including taking a bond, obtaining rent from the tenant, dealing with delays in rental payments
- Property maintenance – including reasonable renovations, upgrades and repairs, as well as regular property inspections
- Complying with regulations – including health and safety requirements for the property and ensuring privacy for the tenant
As you can see, managing a landlord-tenant relationship can be incredibly involved, and the list above is just scratching the surface. However, that’s usually where a property manager comes in.
Residential Property Management and Tenants
Landlords turn to property managers for their expertise, their hands-on service, and their communication. They can fulfill all the duties listed above and more, liaising with the tenant from the very beginning. In some cases, a tenant may never meet their landlord in person when a property manager is involved. The property manager will:
– Interview and screen tenants
– Be the point of contact for maintenance concerns
– Ensure consistent cash flow through rent collection
– Deal with any disputes the tenant has
– Handle any termination issues if necessary
For a tenant, a great property manager is a responsive professional who gets things done and for a landlord, a property manager saves them time, money and stress.
The Landlord & Property Manager Relationship
Just like a lawyer or an accountant, landlords should look for a qualified, specialised and local property manager. It’s important that the property manager prioritises communication, accessibility, low vacancy rates and comprehensive services.
A property manager should be able to help a landlord maximise their ROI in a range of ways, from competitively pricing their rental to selecting the ideal tenant and performing property inspections. Certain guarantees can also go a long way in setting a great Auckland property manager apart.
Above all else, a property manager will offer great communication and services for both the tenant and the landlord, ensuring everyone is happy and profiting from the arrangement.
Finding the Finest Property Management Companies in Auckland
The landlord, the property manager and the tenant truly are a trilogy, and like any great trilogy, the one in the middle ensures the best results. For the finest property management services in Auckland, talk to Walker Weir Property Management. We are a locally owned and operated team that is proud to offer a no-risk rental guarantee.
January 14th, 2018
Most of us understand that real estate can offer great opportunities but not many of us know exactly what’s involved in owning an investment property. If you’re looking to step onto the property ladder, or even if you’re looking to diversify your portfolio, it pays to know investment properties as thoroughly as you know your alphabet.
With that in mind, we’ve put together a guide on what you need to know about investment properties.
Getting Started in Property Investment
While investment properties can be massively rewarding, it’s essential to take stock of your overall financial situation before committing to a rental property.
Generally speaking, you will need a 10% deposit for investment properties, while Lenders Mortgage Insurance costs will apply if you are borrowing more than 80% of the property’s value. New Zealand’s nationwide loan-to-value (LVR) restrictions may also affect how much money you can borrow from the bank.
Either way, if you can secure investment loan pre-approval, you can get a head-start on other investors and find the perfect asset for your needs.
Investment Strategies and Finding the Best Property
What your ideal investment property looks like will depend on your investment strategy and your overall goals. There are several strategies you may wish to employ for your rental property:
- Capital growth: with investment properties historically growing in value, capital growth strategies rely on selling your property for a profit in the future.
- Rental income: an income-generating asset can be extremely valuable for investors, especially if your property becomes cash-flow positive, which means it makes more money than it costs to upkeep.
- Buy low, sell high: buying a property at lower than market rates and selling it for a profit, often after cost-effective renovations, is another investment strategy.
- Subdividing: this involves splitting an existing block of land into several properties, which you can then build on and rent out individually, or sell individually
- Off-the-plan: this refers to buying a property while it’s still under construction, a strategy that may come with the advantage of lower prices for a new, high-value asset.
Investors will often implement several of these strategies with one investment; for example, renting out a property and renovating it in order to generate cash flow now and sell for greater capital gains in the future. Regardless of your approach, all investment properties should prioritise:
- Location – look for a location with good tenant demand and historic property growth
- Infrastructure – schools, transport, entertainment and ongoing development plans are all important to a property’s desirability
- Demographics – an excellent property can still struggle if it’s demographically in the wrong area. Make sure your investment suits the area socially and economically.
Owning an Investment Property – What’s next?
Owning an investment property is just the beginning of your journey. It’s also important to consider the ongoing costs and responsibilities you will have as a property owner. This includes property maintenance, renovations, legal costs and loan expenses.
If you’re renting out your property for income – a very common investment strategy – you will also become a landlord, which comes with extra maintenance responsibilities as well as selecting and regularly liaising with tenants.
For this reason and more, it’s important to have a team of experts on your side to assist with the management of your property. Based in Auckland, Walker Weir Property Management is the friendly, expert management team who can help with the day-to-day care of your investment property. From tenant selection to regular property inspections, we will maximise your income.
To learn more about investing in property and how Walker Weir can help you, contact us online or call 09 972 1212 today!December 1st, 2017
On the 19th of October 2017, we saw New Zealand First form a coalition government with Labour and the Greens. All the parties campaigned heavily on rental property reform, which will include changes to rental properties and the entire industry. It’s going to mean being a landlord in Auckland and across the country will be harder and more expensive. Today, we are discussing the likely changes we will see with this new government. (more…)October 31st, 2017
There’s a lot of confusion out there with landlords and tenants about who pays what when it comes to Watercare’s water bills. The first thing you need to know is Watercare is an organization owned by the Auckland City Council. It takes care of the water supply and treatment throughout the Auckland region. It also controls the billing of water rates throughout the Auckland region. (more…)September 19th, 2017
If you’re an Auckland landlord and you’re wondering about rental property insulation requirements, it’s compulsory to install insulation in your property. On the 1st of July, 2019, it will be mandatory that you fit all your properties with insulation in the ceiling and underfloor. (more…)September 12th, 2017
On the 23rd of September this year New Zealand’s election will take place. Here’s what the main parties, Labour and National, key policies are on Housing: (more…)August 19th, 2017