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Avoiding Common Investment Property Nightmares

Two shocked landlords

New Zealand has a vibrant property market that is attracting a lot of attention at the moment. The general trends of property investment stay relatively constant, but there are always fluctuations over the short term that can make trigger happy investors pull the plug. In this article, we will discuss some of the major investment opportunities and trends in New Zealand right now.

Rental Properties in Demand

Due to a perceived shift in the trajectory of housing prices, many investors have elected to reduce their portfolio size in recent years. This has increased the number of owner occupied houses across New Zealand, and reduced the quantity of rental properties on the market. This swing has led to a rapid increase in rent prices for urban city environments where there is continual population growth. It makes it a great time to be in the investment property game and to let the investments mature rather than being all about the quick flip.

Get the Right Advice

The best advice for any property investor is to do short and long term research on the area you are looking at buying property in. A good way to do this is to look at median housing prices over the last decade and median rents in the same neighbourhood. Talking to landlords can help too, as they have experience on the ground. It is never a bad time to invest in property with the overall trajectory of the market but there are peak troughs and highs in the short term. Compounding social issues can make some areas more attractive for short term or long term investors, and it is therefore important to have a strategy in place for your investment.

Fewer New Homes on the Market

The rise of owner occupied dwelling numbers has led to an increase in new homes and renovations, but increasingly these are places built to be lived in and not sold. As discussed in an earlier blog <link to page7>, older properties pose increased risks and new investors should be aware of the many potential shortfalls of investing in old houses and apartments.

Walker Weir can Manage Your Investment Property

Walker Weir are professional property managers based in Auckland. We have lots of local experience, are well connected in the industry and have our ear to the ground on property trends. If you own an investment apartment or house, we can help you lease it for the best price and manage the upkeep so you can focus on living your life. After all, what’s the point of an investment if you have to spend a lot of time maintaining it yourself? To find out more call us today on 22 657 9432 or contact us online.

August 20th, 2018

Everyone with money is looking for ways to make it work for them. It is well known that the easiest way to make money is investing, but with so many investment products out there it can be hard to decide what kind of investment is right for you. Some people favour the stock market, cryptocurrencies or bonds, but in this article, we will discuss the major benefits of investing in property.

People Need a Place to Live

Everybody needs a roof over their head. Whether it’s an apartment or a house, there is constant demand for housing. Because population is on the rise, there is also an increase in the number of people with a demand for housing. This makes the housing itself a limited commodity and helps to explain why housing prices have been increasing steadily for years. Everybody wants to own their own home, so the demand for rental properties is also increasing, and with that so are rental rates. Both of these factors combined show that the price of getting a roof over your head is increasing much faster than inflation, and it is therefore a good time to own property.

Risks of Property Investments

Every investment has accompanying risk and that of course includes property investments. When you buy your first building, chances are that you are doing so with the help of a mortgage from the bank. This is your first risk, which means you may not be able to meet the repayments and will have to forfeit your investment.

Another thing to be cautious of when investing in property is the age of the building. Old houses and old apartments will often require expensive repairs to make them marketable. It is one reason to always do the due diligence of organising a series of property and infrastructure inspections and reports before you purchase a property.

Outsource Property Management

Your investment property is an asset that is capable of continuously generating dividends in the form of rental payments. Because of this ongoing cash flow, it is possible to outsource the management of your property for a small fraction of this ongoing cash flow. This is a major bonus, as it means you will no longer need to go through the process of facilitating repairs, interviewing tenants or collecting rent.

You can outsource the whole set of responsibilities that usually goes with being a property owner, and sit back on a beach somewhere counting the money that comes back to you. Additionally, if the property management company is decent they will offer a rental income guarantee so that you will continue to get paid even if the tenant is experiencing financial difficulty.

Hire Walker Weir to Manage Your Investment Property

Walker Weir are experts at managing investment properties in Auckland. It is our business to protect the value of your investment and ensure it brings you solid and consistent returns. We gladly oversee the entire process of renting, from tenant selection to facilitating repairs and collecting rent. We even offer a rental income guarantee so that tenant cash flow problems don’t become your problems. Call us today on 022 657 9432 or contact us online.

August 13th, 2018

It can be difficult to know what kind of property is right for you. That’s true whether it comes to a property to live in or invest in. The first consideration of every home purchase is that it should be liveable, but beyond that there are dozens of potential pros and cons to every property. In this article, we will discuss the advantages and potential shortfalls of investing in apartments.

No Garden and a Body Corporate

A major advantage of apartments is that they don’t require as much maintenance as a house. There is no grass to mow and no roof to clean. The body corporate will charge fees, but in exchange will take care of all building and exterior maintenance.

However, this can also work against you in that changes to apartment appliances and structures may be opposed by the same organisation. It is therefore imperative that you are satisfied with the apartment as it is, rather than planning a series of renovations.

Neighbours

It’s a fact of the Auckland Unitary Plan and more high density living in the offing that neighbours are getting closer together. This can be an issue whether you plan to live in your apartment yourself or in the more likely event of planning to lease it. It is worth investigating the reputation of the building you propose to invest in, not just the interior of the apartment itself. A great way to do this is to review the body corporate minutes.  For one thing, buildings with poor reputations attract lower rents. For another, they are more likely to have inter-tenant complaints which can be a hassle for landlords. You can get information on the building by researching the body corporate that manages it.

Location

The most important value determining factor of apartments is location. Apartments in rapidly expanding areas are likely to offer substantial capital returns over a few years. People are willing to pay more to live closer to where they work, and with the way that property and rent prices have been increasing over the last few years, sometimes investing in apartments is a good way to get your foot in the investment property door.

Age of the Building

Unfortunately, most apartment buildings do not age well. While some age and become neighbourhood institutions, others gain chronic conditions and fall into varying states of disrepair. Major repairs and renovations are difficult and complicated when you need to organise several disparate renters who are just trying to get on with their lives. For this reason, if you are looking to invest in an apartment think seriously about how old it is and how many years you are intending to hold onto your investment.

Contact Walker Weir to Manage your Investment Apartment

Walker Weir are highly experienced and reliable property managers in Auckland. We manage all kinds of properties and can oversee the entire process of renting, from tenant selection to hiring tradespeople for repairs. We even offer a rental income guarantee. Call us today on 022 657 9432or contact us online.

August 6th, 2018

Not all property managers are equal. Some property managers are more focused on turning individual profits than maintaining long term beneficial relationships with renters and property owners. A good property manager will treat your property like it is their own, and will always be close at hand if you need to discuss anything. In this article, we will discuss five signs that your property manager is not up to the job and it’s time to find another one.

  1. Poor Local Knowledge

A decent property manager will know local trends. They will be able to ask for the highest possible rent for your property because they know how much it’s worth and what the local prices are. If your property manager can’t tell you the average house value in your suburb or the average rental figures, then they might be spending more time drinking coffee than doing the necessary research for their job.

  1. Bad Google Reviews

It is worth noting that people with negative experiences are more likely to review services than those with adequate experiences. That being said, bad Google reviews for your property manager are worth reading, and if there is a clearly visible pattern of substandard behaviour look elsewhere. The internet has made every aspect of our lives more connected, and that includes researching business capabilities.

  1. Difficult to Contact

A property manager should be readily reachable by both the property owner and the tenant. If they are difficult to contact or impossible to peg down on the phone, chances are that they are shirking their responsibility in more ways than one. The property manager needs to be contactable by tenants to organise repairs in a timely and efficient manner. If the property owner can’t contact the manager, chances are the tenants will have problems too, and seeing how a stitch in time saves nine, a manager who is slow to organise repairs can cost you a lot of money in the long run.

  1. Offers no Guarantees

A good property manager will guarantee their services. For properties where they have selected the tenants, this can include a rental income guarantee, which means that you will always be paid rent even if the tenant fails to. A property manager who refuses to guarantee or insure their services exposes you to substantial risk.

  1. They are Impolite

This might not seem like the most important aspect of property management, but property managers are essentially relationship managers. They need to keep everyone happy, from the tenants to the tradespeople, but most importantly the property owners. Impolite landlords and property managers who act aggressively or arrogantly are difficult to deal with and can cause animosity between themselves and clients, which makes difficult situations harder to deal with.

Walker Weir is Reliable Property Management in Auckland

Walker Weir are professional property managers in Auckland. We are friendly and reliable, check our reviews and testimonials. Call us today on 022 657 9432 or contact us online.

July 30th, 2018

All houses require ongoing maintenance. There is no alternative but to let them fall down around you. As properties get older maintenance that has been avoided can start driving up the cost of repairs. The best way to keep on top of maintenance is to have a yearly schedule for inspections and upkeep. In this article, we will discuss some of the most common repairs for older properties.

Roof Repairs 

Most people don’t realise just how much maintenance roofs require. They should be inspected annually for loose and missing tiles, which is a great time to empty gutters. Most roofs have a lifespan of 20 to 50 years depending on the materials used in construction. All roofs will need to be replaced eventually. Typically metal roofs last longer and require less maintenance than tiles. Problems with roofs escalate quickly; one missing tile creates an opening for wind to easily tear off other tiles. Any small perforation in the waterproofing system of the roof can start the process of water infiltration. Water getting into the roof can swell and destroy insulation, encourage the growth of mould, or compromise the structural integrity of the roofs frame. In some cases, all of that can happen before there are visible signs of water damage inside the property.

Plumbing Repairs

Many people might think plumbing is set in stone but foundations move. Before the prevalence of plastic pipes, plumbing was constructed using materials that are vulnerable to corrosion. Underground plumbing problems with sewage infrastructure is common, particularly given the increases in human density. A subdivided property with four small units might be funnelling through a bottleneck of the original two bedroom home sewage pipe. Of course, plumbing problems occur in the house too. With older houses, regular wear and tear over many years can cause numerous problems with pipes and fittings.

Electrical Repairs

A hundred years ago, electricity was a lot more of a novelty than it is now. These days, there can be hundreds of electrical appliances in every house. Demand and expectations from the electrical grid have never been higher especially with the emergence of electric vehicles.

Unfortunately, older houses were often built without the present demand for electricity wired into their walls. This can cause problems. Additionally, if there have ever been pest problems, there may be exposed or frayed wiring in the walls, exposing the house to risk of electrical fault and fire.

Walker Weir Offers a Full Suite of Landlord Services

Walker Weir are professional property managers in Auckland. Our primary consideration is the property owner’s interests and that means we are thorough with our property maintenance. We carry out regular inspections to catch minor structural issues before they become expensive problems. When repairs are required we will organise them through our extensive list of trusted tradespeople. Call us today on 022 657 9432 or contact us online.

July 23rd, 2018

As a property investor, your primary interest is maintaining the value of your investment. The value of property in Auckland has been steadily increasing for years, so re-sale is always an option that should provide a good return. Renting your investment property is another great way to keep the cash flowing. Renting also creates risks for your property, and that can be daunting for unprepared and inexperienced landlords. In this article, we will explain how a good tenancy agreement can protect your interests.

Avoid Bad Tenants

A comprehensive tenancy agreement will weed out bad tenants. Bad tenants, in this instance refers to those that will push the limits of what is acceptable behaviour in a rental. If you are allergic to particular animals, you will want a tenancy agreement that prohibits those animals from your property. You might not want to live there now, but you may change your mind at some point in the future.

Flats are a rental phenomenon where housemates come and go, and a family home is sometimes shared between half a dozen university students. Sometimes the tenants have turned over at such a rate that there is actually nobody left in the house that signed the original lease. With the right tenancy agreement, you can stop this phenomenon in its tracks by forcing every tenant to register.

Deal with Issues Quickly

Having a detailed and concise tenancy agreement has clauses pertaining to solutions for potential future issues.  Other parts of the tenancy agreement might make it necessary to contact the landlord for any and all repairs, so that the landlord can organise a repair person they trust to do the repairs. That also goes for accidental breakages as repairs the tenants will expect the landlord to pay for, like plumbing.

Legal Protection

A tenancy agreement is a legal document. It is the first line of protection for property investors and managers. The tenants will have a copy of the document and therefore will be able to read and know about it when they breached it. The time involved for taking tenants to the Tenancy Tribunal for any reason can escalate quickly, and should largely be considered as the last possible option. Having a comprehensive tenancy agreement that spells out consequences, rights and responsibilities in easy-to-understand language is the best way to ensure tenants behave in your interests.

Walker Weir Crafts Exceptional Tenancy Agreements

Walker Weir are highly experienced property managers in Auckland. We always consider how best to manage the property owner’s interests, meaning we are thorough with our tenancy agreements. We also carry out regular inspections to catch minor structural issues before they become expensive problems. Call us today on 0226579432 or contact us online.

July 16th, 2018

The best place to be during winter is inside, rugged up and cosy. Unfortunately, old houses can wreak havoc on the best laid plans, and as a landlord there are numerous issues that can arise which require your attention. In this article, we will discuss a few of the most common winter property problems.

Leaky Roofs

While many people don’t realise it, roofs need to be maintained regularly. Old roofs can start losing tiles, accumulate debris in valleys, or become rusted around bolts. It’s important to regularly inspect your roof, but many of these checks get missed during the buying and initial rental phases.  There are a few days of consistent heavy rain during winter that become apparent, and when water is leaking into the house, the problem is quite severe. Roofing problems escalate exponentially, and it is important they are dealt with quickly to avoid costly repairs in the future.

Broken Heaters

In the same vain as leaky roofs not being apparent until the water is flowing through them, broken heating systems won’t be obvious until someone tries to use them.

As a landlord, heatering systems are often supplied as a chattel or appliances with the rental, and therefore it is your responsibility to maintain them. Tenants are liable to become grumpy if they are stuck in a cold house when they paid for a working source of heating.

The best way to avoid getting stuck with a long delay in repairs is to have your property management team check all of the chattels and appliances thoroughly during initial property inspections.

 Storm Damage

 Some storm damage is often unavoidable. The forces of nature can be extreme, and with climate change storms are likely to become more intense and irregular, leading to all sorts of unforeseen outcomes. A lot of storm damage, however, is preventable with good property management. Roof inspections are a great way to isolate and repair loose tiles before they fly off and wreck someone’s car. Another excuse for a roof inspection is to clean gutters, as gutters filled with debris can make it easier for water to get into the roof space.

A tree inspection from a qualified arborist can identify problematic overhanging branches and develop a plan to remove them.

Contact Walker Weir for Efficient Property Management

Walker Weir are experienced property managers in Auckland. We manage a plethora of properties and have an exceptional list of tradespeople on call for all manner of inspections and repairs. We are also persistently thinking about how best to manage the property owner’s interests, which means we are thorough with our regular inspections to catch minor issues before they become expensive problems. Call us today on 0226579432 or contact us online.

July 9th, 2018

Renting an investment property can be a hassle. Understanding the legal obligations of landlords and tenants can take a long time and that’s before you’re even fulfilling them. The ongoing demands of maintenance, chasing rent and doing inspections can really take it out of you. At the end of the day, managing the tenants of even a single investment property can begin to feel like a job. In this article, we will discuss some of the most common issues with tenants that landlords face and explain how a good property manager can save you time and money.

Tenants Not Paying Rent on Time

While it’s never polite to be rude or aggressive about money, paying rent is the basis of a rental contract. There can be dozens of reasons why a tenant has been unable to pay rent on time, and they are more often than not legitimate. Cash flow problems can affect anyone. Whether your tenant is suffering from a recent unemployment, had a spike in medical bills or is simply bad at managing their money, there is always a diplomatic way to go about getting your money. Sometimes a payment plan needs to be devised, other times it may be necessary to wait a week for their next pay cheque. Being demanding and aggressive may lead to a tenant to leave early and place you in the tricky situation of needing to find a new one.

A good property management company will know the ins and outs of communicating delicately and effectively with tenants. A happy tenant is likely to be more reliable and easy to manage. A mark of a successful management company is that they will have a guarantee, meaning that the homeowner always receives their rent, even if the tenant is having cash flow problems. This avoids having the tenant’s cash flow problems becoming yours.

Tenants Being Obstructive Neighbours

As a landlord, you are often approached by neighbours and members of the community when your tenants are loud. It might be all night parties or a drum kit that is only used within daylight hours when the neighbour works nights and sleeps during the day. Often the best solution is to have the tenants solve the issue directly with the neighbours, but sometimes it is impossible and mediation is required.

Thorough screening and a detailed tenancy agreement is usually the best preparation for avoiding tricky situations, but the next best thing is experienced property managers who have experience mediating complex situations.

Undocumented Tenants and Animals

It’s an issue that is all too common. A house gets rented to a couple and unbeknownst to the landlord, half a dozen other friends move in. Different tenancy agreements permit subleasing the property and there is never a uniform way to deal with the situation. A good property manager may be able to find a solution that is beneficial to all parties, such as a slightly increased rent or bond to cover the increased likelihood of property damage.

Walker Weir are Professional Property Managers in Auckland

Walker Weir are highly rated professional property managers in Auckland. We manage properties across the city, making us experts in the industry. Our priority is the property owner, and we offer a rental income guarantee so you can trust us to manage the property while you sit back and watch the money flow. Call us today on 0226579432 or contact us online.

July 9th, 2018

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

 

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
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