The challenges of self-management

Have you recently bought a rental property and wondering whether to engage a property manager, or whether you’ll manage it yourself? There are five basic obligations every landlord must follow.

Paperwork headache
  • 1 October, 2018
  • PROPERTY MANAGEMENT
  • Landlords, Investors, Property Management

Legal obligation to manage the bond or security deposit

You are obliged to follow the Residential Tenancy Act (1986) with regard to the maximum amount of bond you can charge, where it must be lodged and how it should be refunded to your tenant at the end of the tenancy.

Property managers carefully manage the condition report process and ensure both the tenant and landlord agree to the state of the property before the tenant moves in. This, along with regular inspections conducted by trained property managers, helps to ensure there are no ‘surprises’ at the end of the tenancy.

Disclosure of owners’ details

The landlord must legally provide the tenant with certain information about the owner of the property. They must provide in writing the name and address of individuals who will manage the building, collect rent, make repairs and address any complaints. If you use a property manager, their details would be provided keeping the landlord one step removed from the tenant which is preferable to many investors.

Management of maintenance issues

Any maintenance issues with a self-managed property are the responsibility of the landlord. The landlord must adhere to all building codes, perform necessary repairs in a timely manner, maintain common areas, ensure there is a supply of running water, ensure the plumbing, electricity and heating all work and that there is an appropriate place for garbage. They must be contactable at all times of the day in case of an emergency.

Property managers take the stress out of this for landlords. They are the tenants’ go-to person when it comes to issues all hours of the day. Plus, due to their negotiating power with tradespeople, they ensure their landlords get the best price and service on all maintenance jobs.

Obligations to limit liability

As the landlord you are legally obliged to adhere to the terms of the tenancy agreement (written or spoken) including:

  • The property must be safe for the purpose;
  • Ensure all installations are working such as gas, electricity and heating;
  • Installation and appliance maintenance and safety of landlord owned appliances;
  • Treat potentially health threatening issues such as rising damp;
  • Anything else that is stipulated in the tenancy agreement;
  • Manage the refund of the bond.

Legislation changes every year, making it increasingly difficult for landlords to keep abreast. If anything goes wrong, you can end up with a fine or imprisonment.

Having a property manager overseeing your investment and staying across all necessary changes on your behalf, is a wise decision.

Deciding on the appropriate rent

There is a delicate balance between charging too little and too much. A skilled local property manager does this all the time. Property managers are focused on ensuring you maximise your rental return and conduct annual rental appraisals to ensure you are always charging the highest possible rent and maximsing your rental yield.

If you want peace of mind - and no hassle - for your property investment talk to LJ Hooker.

LJ Hooker NZ

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