As schools re-open, the long weekends pass and routines are put in place, for many February often feels like the ‘real’ start of the year. But over here at Lodge City Rentals, our year started on 4 January, with our team clocking up a busy month fielding 2,813 tenant enquiries, facilitating 1,039 property viewings, reviewing 1,128 tenancy applications and signing up 132 new tenancies.
But over here at Lodge City Rentals, our year started on 4 January, with our team clocking up a busy month fielding 2,813 tenant enquiries, facilitating 1,039 property viewings, reviewing 1,128 tenancy applications and signing up 132 new tenancies. On top of this, we solved maintenance issues, conducted property inspections and more to ensure the smooth running of over 3,700 properties. All in a day’s work for our team!
The key story these stats tell me is that the huge demand for rental property I noted throughout 2022 is unrelenting. And the demand is not just coming from people moving within the city. People currently living outside the region are realising the ‘grass is really greener’ in Hamilton, with 42% of new leases being signed by out-of-towners moving to Hamilton and surrounds. For hot suburbs like Rototuna and Chartwell, we often only have a small handful of available properties listed on our website.
Unless the low levels of supply shift sometime soon, I believe the consequence wewill see is rising rents. Over the last 12 months our portfolio saw a 5% average rent increase, slightly above the national rental price increase of 4.4% (from Statistics NZ). While these numbers aren’t going to assist with lessening the ‘cost of living’ crisis, the team over at Lodge Real Estate are starting to see investors return to the market and transacting in the $500,000 to $600,000 price bracket.
So we’ll wait and see what sort of impact that has, along with shifting interest rates and inflation, but if current trends persist we can only see a further reduction in available rental stock. There’s also a general election to consider in October, which can sometimes prove a distraction and see people adopt a holding pattern until the result is known, particularly given the current tight race between our two major parties.
Looking to our day-to-day operations, we’re seeing more private landlords signing on with Lodge City Rentals due to our robust tenant selection process. So for the rest of this blog, I’ll go over some key details about this process and what we do to mitigate the risk for our landlord clients. Plus, I have a quick note as the end of the financial year approaches.
Tenant selection to minimise risk
Securing great tenants is a key part of ensuring a good return on your rental property. You want tenants who take care of the property, pay the rent on time and stay for the long-term, but finding renters who fit this bill is not always a walk in the park.
Unfortunately when some landlords sign up with us, we hear their past horror stories and often when you do get caught out in some way, we can’t ‘fix’ it. Like many aspects of owning a rental property and managing tenants, there is legislation at play; you need to comply with the Privacy Act when gathering information about potential tenants, with a possible penalty of up to $10,000 for non-compliance. There are questions you can and can’t ask, and you should only collect the minimum amount of personal information necessary to make a decision on the tenancy application.
Our team has access to additional resources that help us find good tenants, conducting extensive background checks on databases only available to licensed professionals in the industry. It’s our job to minimise the risk as much as possible, and our experience dealing with people on a day-to-day basis means our property management team has developed a strong ‘gut feel’ for this process.
Plus, we know that as a landlord you don’t want your property left empty for long, so it’s satisfying when we can deliver quick results. For example, one property in Pukete we signed up and leased within one week earlier this month.
The end of the financial year is closing in – don’t panic!
With the 31st of March edging closer, if you own a rental property you’ll know that tax must be paid on any rental income you earn and declared with Inland Revenue. In addition, it’s important to gather your property expense records to claim back any eligible expenses.
While this admin can be time-consuming and stressful, we aim to make it easy for our landlords by simplifying the process. We compile and send every Lodge Rentals landlord a comprehensive financial summary as part of our management package, at no extra charge.
So if you’re already a Lodge Rentals landlord, relax! Our robust admin support team will ensure everything is in order. Or if you’re cringing over my reminder of the work required, get in touch with us about making the switch now. You’ll thank yourself come EOFY 2024.