No Letting Fees – The Upside for Property Investors
From December 12 2018 it became unlawful for a property manager to charge a tenant a letting fee thanks to the Residential Tenancies (Prohibiting Letting Fees) Amendment Act.
At Rental Experts, we responded by removing all clauses and fields about letting fees from our application forms from December 11.
Everyone who had applied for a tenancy with us until that date had been charged a letting fee to recognise the hard work we do, putting roofs over the heads of trustworthy tenants.
The new way Rental Experts pays for the administration time it takes to match the right tenants to a property is this: Small increases in rent now cover the costs of letting services
Director Al Inglis says creating better houses, better landlords and better rental yield for Northland property owners is what Rental Experts is working towards. “We’re instead providing a value-added service. In return our fees are either the same or higher – and what we add is better value.”
Investors benefit from this. “We align with you, focused on returning your dividend. While there may be a recession coming, with a decline in sales and demand, the slow-down in the economy brings a new medium in value. Our clients, our investors should be able to take advantage and buy a new property that gives a better return. I see it all as an opportunity.”
“Instead of letting fees we maximise the rent and bring the investor an extra $10-$20 a week: it’s a long term gain for a short term loss.”
What works is when homes have their value maximised – fully complying with insulation requirements, providing good, warm conditions for tenants and having adequate gardens, fencing and parking where possible. Healthier homes generate better long term tenants, Al notes, and with a small increase in weekly rent reflecting a home’s improved value, landlords get improved rental return.
Because the NZ property market has shown signs of slowing down, “As the market tends to slow, you can grab great property for less money and that means you’re getting an amazing asset for less.”
“Your dollar buys better property.”
LVR and foreign buyer restrictions have slowed sales and more KiwiBuild homes being completed this year will keep people in Auckland. When sales volumes show the market slowing in Auckland, we can infer the market is easing from the top, while prices at the bottom end are kept firm by the shortage of affordable housing in the region.
Al keeps a close eye on the global economy and feels US 10 year bonds dipping are a sign of recession coming. Global outstanding debt in the form of corporate bonds issued by non-financial companies hit record levels at the start of 2019, (US$13 trillio). An OECD research paper says what’s alarming is this is double the amount outstanding in real terms before the financial crisis of 2008.
In fact Global Property Guide says New Zealand’s housing market is cooling rapidly, with house price growth slowing to its weakest pace in seven years. During 2018, the nationwide median house price rose just 1.5%, REINZ says, which is a slowdown from year-on-year rises of 6.28% in 2017, 13.85% in 2016 and 11.49% in 2015.
Please phone, email or visit if you have any questions about the safest investment: bricks and mortar property.
You’ll find our office on Reyburn Street, opposite White Cross and beside Uber Realty and Printing.com.