Landlords, keep your eyes on the prize to achieve your financial goals

The New Zealand economy has been through some tough times of late. Although the needle is turning, with interest rates declining, many people out there are still smarting from the impact of the high cost of living. It is little wonder then that some landlords take it upon themselves to give their tenants a helping hand and not increase the rent.

Of course, not increasing rents is a lovely gesture that should not be frowned upon. However, we like to remind our landlords that the rental property was purchased with a goal in mind and by not increasing rents you are effectively delaying your chance of reaching those goals and maximising your investments performance.

So how do you maximise your investment?
It is important to preserve every bit of value in your investment and keep your property well maintained so it holds its value. By maximising your investment returns you can then easily cover any unexpected maintenance issues whilst still remaining on track to reaching your financial goals.

The main income source from your investment is the rental. By not keeping pace with similar rentals in your area you risk losing money from your investment. However, increase the rent too much and you may lose your tenant.

What steps can you take to get the most out of your property investment?

• Conduct an annual rent review. Understanding the market rent so you aren’t undercharging or overcharging your tenant. Regular reviews also keep your tenant in a position where increases can be better managed instead of holding off for a year or two and landing them with an increase that puts them in a position of financial hardship. This can also be brought up at tribunal level with tenants complaining the increase is too much. All of which can be avoided if you hold annual rental reviews.
• Don’t be afraid to increase the rental. The money obtained will help you keep abreast of any maintenance and improvements needed at the property, not to mention unexpected costs. This assures tenants that you are giving them a home to live in and it’s not just an ignored investment.
• Don’t delay any maintenance – chances are over time it will get worse or become a negotiation point for your tenant to reduce the rental price.
• Keep your relationship with your tenant nice and transparent. They know when the reviews are (we recommend giving them 60 days’ notice of a review) and can plan for a possible lift in rental payments ahead of time.

If this all sounds a little tough to handle on your own, our team of professionals can help you manage it all. Our team have been following these guidelines for many years and have the ability to best understand both the needs of the landlord and tenant, which in turn makes the whole rent review process a lot more seamless.