What do landlords actually want?

Recently we have been running seminars in Auckland for property managers, titled “What do Landlords actually want?”  We have had a great response from all types of property management companies, from start-ups to established nationwide brands.  In the current economic situation landlords – and property managers acting on their behalf – have to focus on looking after the property long term.  This asset management is now, more than ever, as much an important part of the business as rent collection.

I watched the news in horror last weekend as people who let a holiday home in Omaha were injured when the deck they were on collapsed.

The owner was quick to point out she had had a builder look over the decks in the last few years and although one deck had been closed off and marked as unsafe, the one that collapsed was deemed okay for use by tenants.

It’s very important for landlords to note recent changes to the Residential Tenancies Act. This includes a new list of “unlawful acts” with specific fines which has been added.  Landlords may be fined up to $3,000 if they fail to provide the property in a reasonably clean state or fail to carry out maintenance or building and health and safety requirements.

This means it is no longer acceptable for landlords to not carry out maintenance to rental properties or take reasonable measures to ensure that their properties are safe for tenants and or anyone else in those properties.

Now we are all in business as property investors and every business has property costs, and no business likes costs.  But I have seen rental properties where children have fallen through decks, through banister rails, walked through glass sliding doors or had those doors shatter on top of them after failing to slide and tenants falling through the front step as they are putting keys in their door.  Consequently I welcome the new changes and hope that they are enforced wherever possible.  I’m sure we haven’t heard the last of the Omaha issue, as the police and Auckland City Council are also now involved.  This is a real wake-up call for landlords – both with full-time tenants and holiday rentals – to realise that they have a responsibility as business owners and providers of accommodation.

A maintenance plan for your properties
It’s very important to have a maintenance plan for your properties that covers up to 5 or even 10 years.  This plan should be based around regular inspections of the property by you as the landlord or your property manager.  This plan should focus primarily on the upkeep of the property to ensure that it poses no health and safety risks in the same manner your own home would be up kept so that your own family are safe.

Areas of concern in particular should be:
• Electrical appliances and wiring including sockets (these should be tested by a registered electrician.)
• Decks of any height, including all railing and steps.
• Do our rental properties have smoke alarms and are they working? (Tenants don’t change batteries very often, so you should.)
• If possible check under your property for water leaks in and around wet areas such as bathrooms, laundries and kitchens; it will be obvious if a floor is wet and you can avoid a nasty accident.
• Always ensure glass is securely fixed in frames, including both wooden and aluminium joinery.
• Also check that sliding or bi-fold doors are fully operational and serviced.
• Have your chimney swept every year as a matter of course and your chimney stack inspected for cracks to ensure you meet insurance purposes and again comply with health and safety.

If you employ a property manager take the time to fully understand exactly what they inspect at each inspection and what information they will send to you – does that information include photos for both your records?  This will be crucial if something does happen.  What, if any plan, do they have to ensure your property is asset managed to the highest standards?  Who is liable should something happen?  Are they insured against any possible outcome or are you?  Ignorance is not going to be an acceptable excuse even for absentee landlords from now on.

This is not a tropical island!
Recently Fair Go ran a full one-hour special on property and property maintenance, and it pointed out that we are extremely poor at maintaining even our own homes.  The average household spends less than $4000 per annum on maintenance, so it’s not just our investment properties that are being left to go unmaintained.

Fair Go vividly pointed out that our climate is not actually one of a tropical island and that in most parts of New Zealand many homes suffer from mould, which is dangerous to your health in many ways – especially for asthmatics and if left can have serious health side-effects.

Fair Go showed the dramatic effect that an unclipped downpipe can have under a house and how easy it was to fix the problem once located.  A simple maintenance plan would pick this up at an early stage and help to avoid the huge cost of removing the mould and having to repaint ceilings throughout a property.

Even the Government is playing its part with the EECA (www.energywise.govt.nz) scheme, which provides huge incentives for landlords to insulate (particularly with WINZ tenants). Prospective tenants will choose your property over an uninsulated property and even pay more rent to live there (especially in winter).

So the question remains, “What do landlords actually want?”

Well, the answers are generic and very simple:

  • Landlords want good tenants who pay their rent on time and they want low vacancy rates and usually long tenancies.
  • Landlords want property management companies that take care of all of those issues and they want their property professionally asset-managed and taken care of for the long term.
  • Landlords would like capital gain on their properties and for interest rates to stay low for as long as possible.
  • Landlords also want happy tenants who live in healthy and safe homes just as they themselves do.

 

Mark Trafford Director “Maintain To Profit”