Ray White Warkworth
Investor Gate Property Management Newsletter - May Issue
“An investment in knowledge pays the best interest”
Benjamin Franklin
It is astounding in the property management field how much knowledge is required. Change is a constant, reading and ongoing education is essential to keep updated to be competent within our field. Knowledge has to be international, national and local. Events impact on our environment. For example the recent unforeseen circumstances in Christchurch have impacted on the Auckland market and the ripple effect stretches out through our region. Similarly, immigration and the economy affect the residential rental market.
Legislation has a huge impact - the recent taxation changes have affected investors and the recent amendments to the Residential Tenancies Act are profound. Many other pieces of legislation have varying degrees of effect and as professionals we need to involve ourselves in ongoing training.
How is your knowledge of legislation affecting your investment? Check out the quiz below
1. What is the maximum value of a claim which can be decided by the Tenancy Tribunal?
2. What is he maximum bond that a tenant can be asked to pay?
3. How long can a landlord (including the agent) hold onto a bond before lodging it with the Bond Centre?
4. How long can a landlord be out of the country before the law obliges them to appoint an agent?
5. How much can you be fined if you fail to appoint an agent?
6. What would be three signs in your property which would suggest that meth was being cooked?
7. Can you increase the rent during a Fixed Term tenancy?
8. Name seven pieces of legislation that impact on your role as an investor?
9. If a tenant breaches their agreement, you will need to issue a …….... day letter to remedy.
10. When giving a tenant notice, when is the 42 day notice (plus delivery) appropriate? When is the 90 days notice appropriate?
(Answers at bottom of Page)
I’m sorry, your policy doesn’t cover that...
Do you know what your current insurance policy on your rental investment covers you for? In most cases, we have found the answer from property owners is “No”. Did you read the fine print? Again, in most cases, a resounding “No”.
Recently, a few of us here at Bogue Real Estate, attended a morning where presentations were made by a number of companies that provide specific insurance policies for landlords. All had their differences, but all were able to show us some frightening examples where many policies have had severe shortcomings.
Did you know that some policies do not cover ‘malicious damage’? So, if a tenant or a relationship between tenants goes horribly wrong and one or more of the tenants decides to ‘take it out on the property’, some household policies do not cover this. Others have a very low maximum payable.
Did you know that some policies only cover damage caused by the tenants, but not their guests? We were also told of a property owner that lost 15 weeks of rental income while the police investigated a crime that took place in their property and they took their time cleaning up.
Were you aware that most policies require a minimum number of regular property inspections to be carried out each year and that many require a certain amount of bond, which must be registered with Tenancy Services, or claims can be voided.
Next month we will report more fully on our findings and the alternative policies available. In the meantime we seriously suggest you check the fine print in your policy.
Meth cooking risk
We recently attended a seminar about “Meth Minder”. A monitored devise installed in properties. It is a monitoring system but also a deterrent to possible meth use and cooking on properties. Perhaps you would like to Google Meth Minder and find out more.
We will be investigating further.
Frequently Asked Questions
Am I really at risk?
Yes you are. Depending on where your property is located, the risk will vary. Meth cooks tend to prefer quieter, more private locations. However, they use motel and hotel rooms to cook in, so any property is a potential meth lab. Recently a lab was discovered in a house in the middle of Remuera, which is one of Auckland’s prestige suburbs.
How much of a risk is it?
It is a real and increasing risk. While the number of labs found around the country by police is averaging around 200, estimates put this at 5 to 10% of the total number. Running the numbers, this means:
· 2,000 - 4,000 active and highly mobile meth labs in operation in New Zealand
· Assuming just one move per lab per year, this is 4,000 - 8,000 properties affected each year
· The meth issue has been with us for over a decade
· Only 50,000 buildings in NZ are ‘leaky’ - so Meth contamination will be a bigger issue
· There are no obvious characteristics that allow you to spot a meth lab or meth cook
Isn’t this just a problem in State housing and low cost rentals?
It is a big problem in State housing. However, a meth cook makes tens of thousands of dollars in just a few hours. They are cash rich and high end rentals and holiday homes are still at risk as money is no object. This is evident by the meth labs uncovered in suburbs such as Remuera and Bucklands Beach.
How can I spot a meth cook?
You can’t. They come from all walks of life. Statistically, the majority of meth cooks are European males in their mid 30’s to 40’s who have a family. They are people who have been meth addicts and turn to cooking to pay for a habit they can no longer support by legal means. Today’s bright young doctor or lawyer, who is the model tenant, can easily be tomorrow’s meth cook!
What is the consequence of having a meth cook in my property?
If a meth cook is detected early, then a few hundred dollars spent on testing and a professional clean up will get the property fit for habitation. If they are not detected early, then the worst case scenario is that the property is condemned. The best case is many thousands of dollars in clean up and rehabilitation.
Man left homeless by agency
A judge has told the State Housing Agency it was “not helpful” to evict a vulnerable tenant who had nowhere to go. By David Fisher
This recent article in the “Herald on Sunday” highlighted the challenges facing property managers working for Housing New Zealand.
Tenancy Tribunal adjudicator Louise Binns told Housing New Zealand she was "disappointed and surprised" after it had failed to find a better solution than making its tenant homeless.
The case has been described as illustrating Housing New Zealand's new direction - a focus on managing houses rather than housing people. But Minister Phil Heatley has demanded it "get back to core business which is tenancy management".
Housing NZ tenant Thomas Moore, 59, who suffers from bipolar disorder, was moved from his Western Springs flat to a string of pensioner units in Ponsonby while renovations were carried out.
He said he was accused of assaulting a neighbour - which he denied - and was told he was no longer welcome as a tenant.
Housing NZ wrote to Moore on December 22, advising him that he was being evicted and had 90 days to move out.
At the Tenancy Tribunal, Moore said he had nowhere to go and provided evidence from his mental health nurse and psychiatrist which said eviction would make him unwell. One letter stated "secure and stable housing is essential for his continued wellness". The agency was told by the adjudicator to find a better option for Moore.
Binns said landlords had the right to kick out tenants after 90 days' notice but Housing NZ was set up to provide social housing for the disadvantaged.
"Mr Moore has nowhere to go and if I terminate the tenancy today he will be out on the street and no doubt his health will deteriorate immediately." It would be "irresponsible" to allow this to happen. "I am disappointed and surprised that Housing NZ are unwilling to assist Mr Moore."
A Housing NZ spokesman said there was an allegation that Moore had "assaulted his elderly neighbour while drunk", leading to his eviction notice. Moore replied: "They wanted to wash their hands entirely of me. They don't want me as a tenant - but I'm not a difficult tenant."
Labour housing spokeswoman Moana Mackey said Housing NZ had made it clear that it was acting as a landlord like any other. "They are evicting people left, right and centre using these 90-day notices. It's really sad to see our state housing provider treating people so badly."
Our Valued Trades People
We recommend our trades people to you. Without them our property management department would not function nearly as smoothly as it does. Their role is often challenging. Increasingly, tenants are not willing to let trades people enter without being present or requiring them to reschedule appointments which are outside regular working hours.
We employ trades people whose quotes are reasonable and whose practices are ethical and transparent. Generally, they are small business owners operating much like ourselves. This means our landlords are not paying for the inflated overheads associated with larger companies.
Rarely do we pay an overtime rate and the trades people know they cannot exceed their imposed limit without discussion. (Sometimes there are emergencies). Often it is their assistance which helps minimise down-time for landlords, quickly painting a bathroom between tenants or replacing some carpet when there is a limited amount of time.
The trades people value our regular work and prompt on-line payments. We value their efforts.
Recent Rentals
DBH = Department of Building and Housing - 1/11/10 - 30/04/11
| |
Snells Beach |
Warkworth |
Warkworth |
Point Wells |
Mangawhai Heads |
|---|---|---|---|---|---|
|
2 bedroom, single garage |
3 bedroom, ensuite, double garage |
3 bedroom, easy walk to town, single garage |
3 bedroom, single garage |
3 bedroom, walk to shops, close to estuary |
|
| Our Figure (per week) | $330 | $420 | $340 | $350 | $250 |
| DBH Statistics Median Price | $312 | $375 | $330 | $330 | $250 |
| |
Orewa |
Red Beach |
Orewa |
Hatfield Beach |
Mangawhai (Rural) |
|
2 bedroom, 1 bathroom, carport |
4 bedrooms, 2 bathrooms, double garage |
3 bedroom, 1 bathroom, carport |
2 bedrooms, 1 bathroom, beach bach |
2 bedroom, old farmhouse, needs spruce up |
|
| Our Figure (per week) | $340 | $480 | $380 | $275 | $300 |
| DBH Statistics Median Price | $340 | $460 | $370 | N/A | $250 |
WARKWORTH $319,000 WAR21137If you are sick of propping up someone Else's Mortgage repayments and seeing no reward for your hard earned wages then this is your opportunity to kick the Landlord to touch.
Rental return $330.00 p.w.
WARKWORTH $299,000 WAR213422 bedroom unit featuring open living and private rear garden, with a good aspect to the sun. Off street parking plus carport access to this one level home.
Expected rental return $280.00 p.w.
SNELLS BEACH $349,000 WAR21337Open plan home has 2 dbl brms plus a large rumpus/sleepout with its own kitchenette, shower & toilet.. Dbl garage. Sea views from sunny deck.
Expected rental return $310.00 p.w.
SNELLS BEACH $299,000 WAR21224$40,000 less to sell fast! A smart fresh look with new carpet, updated kitchen and fresh paint. 3brm, open plan home. Private, quiet and sheltered. It’s a ‘Keith Hay’.
Expected rental return $330.00 p.w.
OREWA $529,000 ORW20922No steps—no stairs. One level B&T, north facing townhouse. Spacious open plan living flows out to a private garden courtyard. 3 brms, ensuite, gge with int. access.
Expected rental return $430-$450 p.w.
OREWA $419,000 ORW20875Modern 3brm, 2bthrm apartment. 3 storey with int. access single garage, private courtyard garden & 2 balconies with views to ocean. Communal swimming pool.
Expected rental return $380-$400 p.w.
OREWA $429,000 ORW20908Attractive 2 dbl brm unit, master with semi-ensuite, 2 toilets, separate laundry. Open plan kitchen & living area opening onto large conservatory. Fully fenced.
Expected rental return $330-$350 p.w.
OREWA $390,000 ORW20851Superb unit, 2 bedrooms, so close to town, beach, churches, doctors etc. Internal access garage. Move in today!
Expected rental return $330-$350 p.w.
Quiz Answers 1. $50,000 2. 4 weeks 3. 23 working days 4. 21 days 5. $1,000 6. A metallic taste in your mouth, discolouration of walls and ceiling, feelings of nausea and headaches. 7. Yes, provided the correct clause is in the tenancy agreement. 8. Privacy Act, Residential Tenancies Act, Residential Tenancies Amendment Act, Fair Trading Act, Unit Titles Act, Building Act, Health and Safety Act 9. 14 10. 42 days notice (plus postage time) is appropriate if the owner or a family member is moving into the property, or if the property is sold. 90 days notice is appropriate in any other case.
Disclaimer
In preparing this document we have used our best endeavors to ensure the accuracy of all the information provided. We accept no liability or responsibility for any errors or inaccuracies and recommend that all recipients make their own enquiries to verify any information given.