Managing a rental can be a rewarding experience and, when done right, can turn into a healthy money-maker for an investor portfolio. However, the rental landscape is in a constant state of flux. New laws and regulations, including changes to the Residential Tenancies Act 2016 and the introduction of the Healthy Homes Standards, are causing many landlords to reassess their properties and how they want to manage them going forward.
In this guide, we delve into the common FAQs new landlords often ask:
New Zealand has a history of poor quality rental stock, which is why as a landlord of today, you must ensure any property you rent is warm, dry and safe. The recently introduced Healthy Homes Standards provides a set of minimum benchmarks for heating, insulation, moisture and drainage, and draught-stopping that your property must either meet now, or in the near future.
Read more: Healthy Homes Standards: what every private landlord needs to know
There are two types of tenancies landlords can offer tenants: periodic and fixed-term. Below we run through the pros and cons of each.
A periodic tenancy is a tenancy that has no end date. It continues until either you, the landlord, or the tenant gives notice.
Pros:
Cons:
As its name suggests, a fixed-term tenancy locks both you and the tenants into a contract for a fixed period of time. This can be anywhere between six months to five years. Once a fixed-term tenancy ends, it automatically becomes a periodic tenancy.
Pros:
Cons:
A tenancy agreement is a legal document, so it’s important to get it right. This is why many landlords enlist the help of a property management professional or, at the very least, make use of the tenancy agreement template from Tenancy Services.
With this in mind, all tenancy agreements should contain the following:
Important! The tenancy agreement must be in writing and signed by both the landlord and tenant. That said, if you do not put the formal agreement in writing, the Residential Tenancies Act will still apply to the tenancy and your property.1
Under the Healthy Homes Standards, landlords are now also legally required to include:
You can read more here.
As a landlord, you will need to keep records of:
You should keep these general records during and for 12 months after the tenancy.
The recently introduced Healthy Homes Standards also require landlords to be able to produce evidence that their rental property is compliant with the new minimum standards. This could include the following documents:
The table below highlights the medium rent for Hamilton’s main suburbs. Remember, this is only a guide. What you can charge for rent is dependent on the type of property, what condition it’s in and its unique features (such as school zoning, low maintenance materials, or modern kitchen).
Suburb(s) |
Rent per week |
Te Kowhai/St Andrews/Queenwood |
$470 |
Flagstaff/Rototuna |
$550 |
Claudelands |
$280 |
Fairfield/Fairview Downs |
$425 |
Hamilton East/University |
$395 |
Hillcrest/Silverdale/Tamahere |
$450 |
Dinsdale North/Nawton |
$430 |
Dinsdale South/Frankton |
$410 |
Hamilton Central/Maeroa/Frankton Junction |
$320 |
Deanwell/Melville/Fitzroy |
$400 |
Source: QV.com, September 2019.
Read more: 6 steps to work out how much rent you should charge
A property can remain vacant between tenancies anywhere from a few weeks to several months, particularly if the home needs maintenance and repair work done to bring it up to standard.
At Lodge, we recommend having two to four months of mortgage payments saved as a precaution and budgeting for a two-week vacancy every two years if you have a fixed-term tenancy agreement.
The maximum bond you can charge is the equivalent of four weeks’ rent.
Note: If you increase your rent, you can request your tenants “top up” the bond to reflect the increase.
No. Under the Residential Tenancies Act, landlords are not permitted to pass on the cost of a letting agent or solicitor to their tenants.
Read more here.
Under the same law, landlords are prohibited from asking for key money to grant or change a tenancy.
Legally, a landlord can only carry out one inspection every four weeks.2
That said, some insurance companies require landlords to conduct quarterly property inspections as a condition of their landlord insurance.
At Lodge, we recommend conducting quarterly inspections for new tenancies, then extending it to once every six months where appropriate.
Read more: How much time and effort goes into a property inspection?
Task |
Landlord |
Tenant |
Keeping property in a reasonable state of repair |
✔️ | |
Keeping the premises clean and tidy |
✔️ | |
Security (e.g. locks) |
✔️ | |
Lawns and garden upkeep |
✔️ | |
Pruning and tree removal |
✔️ | |
External property work (e.g. painting, clearing cutters). |
✔️ | |
Chimney cleaning |
✔️ | |
Replacing light bulbs and smoke detector batteries |
✔️(unless lightbulbs are non-standard, then it is the landlord’s responsibility) |
|
Phone, internet and TV (ensure they are maintained and function properly) |
✔️(only if the landlord provides the property with these services) |
|
Intentional damage by tenant |
✔️ | |
Intentional damage by invited guests of the tenant |
✔️ | |
Damage from burglaries |
✔️(via landlord insurance) |
|
Damage from natural events (e.g. a storm) |
✔️(via landlord insurance) |
|
Accidental damage due to tenant carelessness that is COVERED by landlord insurance |
✔️ | |
Accidental damage due to tenant carelessness that’s NOT COVERED by landlord insurance |
✔️ |
Read more: Landlord or tenant: who’s responsible for property maintenance? | 3 formulas to help you budget your rental property maintenance | Who is responsible for pest control in a rental property?
There’s no limit on how much you can increase your rent. However, increasing the rent too much or too frequently can drive away good tenants and make it difficult to get new ones.
Legally, you cannot increase the rent:
The only exceptions to the 180-day rule is if you’ve made improvements to the property (e.g. installed a new kitchen) that increases the value of the property and is beneficial to the tenant. Or if you change the tenancy agreement in a way that benefits the tenant.
You must also give 60 days written notice of the increase. This notice must include:
At Lodge, we recommend undertaking a rental appraisal once a year and adjusting your rent to reflect the market rate for the suburb, the type of property (e.g. house, apartment, unit etc) and its condition.
Read more: 6 steps to work out how much you should charge for rent
Get in touch with your tenant first and find out if they’re aware they’ve missed a payment. Often it is a case of a transaction not going through.
If your tenant is having difficulty paying, see if they are willing to pay their missed rent in instalments until they’ve cleared the debt.
Important! Always record any agreement in writing.
If the issue remains unresolved, and the tenant owes less than 21 days rent, you can send a notice to remedy.
If the notice to remedy is ignored, or if the tenant owes more than 21 days of rent, you can apply to the Tenancy Tribunal for termination of the tenancy.
If you are using a periodic tenancy agreement, you need to give your tenants:
If you are using a fixed-term tenancy agreement, you can only end the tenancy early if:
Read more: How do I give notice to end a tenancy agreement? | How do I evict tenants from my rental property? | Selling a tenanted property: your responsibilities as a landlord
1. Tenancy Services, 2019.
2. Community Law NZ, 2019.