There are few better ways to gear up for retirement and build wealth than buying and holding property long term in New Zealand. As lucrative as it can be, managing the property and tenants yourself is often difficult, time-consuming and stressful. But we're here to help you avoid that stress as best you can.
In this blog, we've taken a look at expensive mistakes often made by new landlords and offered tips on avoiding them.
1. Failing to screen tenants thoroughly
New landlords often fail to carry out the same rigorous tenant screening that professional property managers do, selecting tenants that end up hurting the profitability of their investments. To make sure you've chosen the right person you or your property manager should:
- Search tenancy databases to find more about their rental and dispute history.
- Check credit reports to ensure tenants can afford to pay rent.
- Speak to referees including employers and past landlords.
The quality of your tenant determines the success of your investment, so it's well worth taking the time to be careful.
2. Misunderstanding tenancy law
Tenancy law in New Zealand can be complex and confusing - there are dozens of laws landlords need to be familiar with before managing their property themselves. Not knowing the law can lead to heavy fines, disputes with tenants and worse. All of this not only hurts the performance of your investment, but it also makes life hard for you and your tenants.
The best solution here is to hire a property manager you trust. They will already know the tenancy law inside out, providing a layer of protection against your tenants.
3. Not treating your investment as a business
New landlords often make decisions based on emotions, lacking organisation and a coherent plan. If you want your investment to be successful you need to treat it as a business and your tenants as customers, making decisions that improve your bottom line.
The best way to avoid this pitfall is to take your property seriously and get expert advice from property managers, accountants and experienced investors.
4. Skipping house inspections
Most of us like to think the best of people, but at the end of the day, your tenants are strangers. For that reason, missing quarterly inspections puts your home at risk and jeopardises your insurance cover, which can prove costly.
It's a good idea to either hire a property
5. Not spending time on maintenance
New, busy landlords sometimes ignore maintenance or repair requests from tenants. This can lead to tenancy tribunal disputes and fines down the track, as well as degrading the property and decreasing its value.
A good approach to preventative maintenance and being responsive with tenants is
You may be an amateur landlord now, but with time and the right advice, you can manage your property like a professional. Who better to learn from than the Professionals Real Estate Group?