We Have Lift-Off!

Summer, such as it's been here in Wellington, is making its presence felt. It's definitely warmer, but the rain is a bit persistent! And from the moment we got back to the office, the phones have been ringing and emails flying - everyone is on the move and the market has awoken from the long dark winter of discontent.


But don't get complacent. This doesn't necessarily mean that you're going to get trampled down in the rush from tenants wanting to rent your place, although it can happen. Here's a wee story that blew me away, and it's from personal experience.

We have a new client who owns a house in the heart of Wellington, with four bedrooms on two floors, and a distinctive "student" feel to it. It's got heaps of character (you know, wooden staircase, high ceilings, giant sash windows, creaky old cupboards and a Victorian bathroom) and it's close to almost every educational seat of learning the capital of New Zealand has to offer.


Our new client signed up on a recent Friday morning, and two hours later put a full advertisement up on Trade Me, with some good photographs. Within five minutes of the advert going up, we started receiving phone calls, texts, and emails. Our text shortcode service went crazy with people texting for details. When that level of interest is sparked, it's time to arrange an open viewing really quickly.


So that Sunday at 3.30pm on a wet, windy and unseasonably cold afternoon, I drove to this lovely old property to spot a small group of about ten people patiently braving the elements outside the house. Little did I know that this group of ten were the tail end of a queue of people stretching down the path to the front door. I squeezed past them all and opened up the empty house and starting letting people in.


the stream of people didn't stop! I soon had a stream of people going up the right hand side of the stairs, and another stream coming down the left hand side. Every room had a crowd in it. The kitchen and dining room had people furtively grabbing application forms and shouting for pens to fill them out. I had to explain to large groups on each room that applications should be done online (www.apply.net.nz) and tell them what makes a good tenant.


It was CHAOS!! The best kind of chaos, from a property owner's perspective.


Within the next 48 hours, we received over seventy applications online, and a whole bunch more were handwritten, scanned, emailed, posted and handed in to our office. Phew!


So how do you choose from this tidal wave of fresh faced and bushy tailed prospective tenants? Where do you start?


Well, three particular groups stood out for me, and what they did was very simple. In fact it amazes me that more people don't do this as a matter of course when applying to rent a property. Each of these groups presented me with printed information on each of the applicants in their group. They had their names, ages, references with phone and email details, a list of work and education experience, and an explanation of how they all knew each other and why they wanted to move in together.


They also each explained that, as students, they were looking to have a place to study towards their exams, rather than setting up Party Central and wrecking the place.


Simple, but real genius. I've lost count of the number of people who turn up at a property viewing who want to take the place, but when I ask them for good references, they seem bewildered and unprepared for this obvious requirement. Kind of like going to an auction and then being surprised when someone tells you you'll need money to pay for anything you buy there.


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managemyproperty is an independent Property Management company based in Wellington, New Zealand. Richard Horne remains a tireless and energetic investor and commentator, running an experienced eye over the property market.

Visit the website at www.managemyproperty.co.nz

Wellington Market Review – December 2011

According to Tony Alexander of BNZ – “Our eighth survey of over 10,000 licensed real estate agents throughout New Zealand has found that overall the residential real estate market is moving up, but with the past month revealing a rise in the number of vendors wanting to make a sale. That is, things have moved from broadly neutral to being more of a buyer’s market. But there is also strongly rising buyer interest – from first home buyers but not from investors. For the fifth month in a row the perception of agents on average is that prices are rising. But at a net 12% positive this reading is the lowest since the net 5% in June feeling prices were falling.”

What’s Happening with Advertised Rents? 

I might just stick my neck out and say that rents have now hit bottom and are starting to show a little regrouping at the moment. In the weeks before Christmas, we’re finding enquiries are up and some properties have let for good and fair rents. The word from tenants on the street is that there’s not much for them to choose from so available properties can get snapped up quickly.

However there is no rhyme or reason to some properties being vacant, and it can hurt an investor’s pocket when the mortgage needs paid but there’s no rent coming in. Here’s what’s going on out there right now in Wellington region:

Top Range: 

Steady turnover, but of course with the New Year looming, enquiries from embassies, consulates, and our corporate clients are rising weekly. You should be able to rent at this level fairly easily for the next three months.

Mid Range: 

Good standard housing stock still rents okay, but there have been some properties advertised for long periods before finding a tenant. Best that you prepare for extra down time still, and if you rent your place quickly, that’s a bonus.

Lower Range: 

One bedroom units and smaller two bedroom properties are renting much more easily. In fact they just might be the next target for savvy investors as they are cheap to buy and relatively speaking they offer a good return while renting more easily.

If I was advertising a property now, what can I expect?

You’ll need to be more flexible with your viewing times, and make an extra effort to get people through your property to get the best chance of signing someone up. It’s frustrating, but everyone seems to want to look at a rental on a weekday evening, or right in the middle of a sunny weekend when you’d rather be on the beach.

My advice? Get a property manager.

Happy Christmas!

How NOT to Let a Vacant Property!

I recently encountered a property investor who told me he wasn't very happy with his property manager. He explained that his rental was currently vacant and had been for about eight weeks, and he wanted to know more about what level of service we could offer him if he changed over to us as his property manager.


Never one to miss an opportunity to promote our company, I told him more about what we do. I also explained that we don't have a silver bullet that will cure the problem of a vacant property, especially in a flat market like Wellington is going through right now. Vacancies are more common at the moment, and sometimes changing your property manager doesn't necessarily mean you're going to get a better result.


However, what he told next made me realise that service levels in this industry can be set pretty low sometimes! It seems that his current property manager did not show his property on the weekends, or in the evenings, or indeed anytime outside business hours.


Moreover, his property manager was not keen to show the property after dark! That might explain why the place was still empty....


So did the property investor become a new client owner for me? You bet! And to answer the other questions popping up in your head:

1. Yes we show properties on the weekends
2. Yes we show properties outside "business hours" AND after dark
3. Yes we found a new tenant within a week

It's my view that property management cannot possibly be done only within "business hours", and any property management company whose telephone message informs you that "Office hours are from 9am to 5pm Monday to Friday" is not offering a level of service that's acceptable.

Property management is a 24/7 commitment, and managemyproperty are more than prepared to meet that standard.

managemyproperty is an independent Property Management company based in Wellington, New Zealand. Richard Horne remains a tireless and energetic investor and commentator, running an experienced eye over the property market.

Visit the website at www.managemyproperty.co.nz

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Wellington Market Review - October 2011

Here in the Capital, the market has been bumping along the bottom for some time now. With bank rates at an all time low and property sales prices depressed, things have been static and/or receding. However, there are signs that things are slowly thawing and improving.

What’s the Government saying?

http://www.minhousing.govt.nz/market-rent. You'll find the Department of Building & Housing statistics interesting reading. Generally though, rents haven't changed much in the last month.

What’s Happening with Advertised Rents?

A gentle reduction over the winter months has possibly started to turn around at last. Some apartment complexes are attaining improved rent rates as tenants move on, and there have been modest gains with inner city quality apartments. Flats, units and smaller houses are still flat but seem to have stopped falling.

Top Range:

Large and top quality family homes remain quietly popular. Very few remain empty for long, and as the summer warms us all up and the New Year brings inevitable changes, these properties will fill quite quickly now.

Mid Range:

Still flat, but rents don't seem to be dropping much more. Vacancy times can still be extended, but the student market and young couples are starting to appear at open viewings and these properties are also showing signs of activity.

Lower Range:

Rents in this sector remain relatively healthy, and there are some good property deals out there from what we are seeing. Investors in Wellington seem to be favouring this property type, and I've seen a good number of new owners bring their one and two bedroom units and flats to us for management.

If I was advertising a property now, what can I expect?

You should have your property listed and advertised in at least six different media formats so that you are reaching as many potential tenants as possible. As has been the case over the whole winter, expect to work hard to catch your next tenant. You can lead a horse to water, but you can't make it move in and pay the rent. Your best option would be to stop advertising your property yourself, and get it managed by a professional Property Manager.

Good luck!

managemyproperty is an independent Property Management company based in Wellington, New Zealand. Richard Horne remains a tireless and energetic investor and commentator, running an experienced eye over the property market.

Visit the website at www.managemyproperty.co.nz

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Wellington Market Review - August 2011

If there is light at the end of the tunnel, then it’s very dim…. The market remains obstinately quiet, with activity levels verging on flatlining. I realise that this is NOT the news that you want to hear, but our current experience in the Wellington rental marketplace is proving to be frustrating.

Rental owners should be using this quiet time to work on maintenance issues and do all that they can to freshen up their properties. If your rental is tenant, your tenants will love you for taking care of the place and looking after them. If your place is vacant, a lick of paint or a new carpet will work wonders towards securing your next tenant quicker than the rest of the advertisers on TradeMe.

What’s the Government saying?

For what it’s worth, check out what’s happening in your area by visiting http://www.minhousing.govt.nz/market-rent. However, you should be aware that the Government’s figures are not only historic, but are also now quoted over a six month period rather than the three month period as before. That little manoeuvre flattens the averages out a bit more and could skew the available statistics.

What’s Happening with Advertised Rents?

Over the last few weeks we’ve had to go back to owners and suggest that they drop their advertised rents as we’re not getting a huge reaction to our available listings. Newspaper and online adverts are running longer, rents are slipping back, and we’re finding that on changeover of a tenancy the new rent can be 10% lower than before.

Top Range:

What is commonly referred to as the Executive market steams ahead quietly and performs in much the same way as it always seems to. That’s not to say there is vacancy downtime, but it’s less of a concern than the rest of the market.

Mid Range:

Flat, with rents dropping still, so I can’t really add much to that. As a property manager, I hate dropping rents, so if your property manager suggests lowering the rent to get a tenant in, there’s a very good reason why they are suggesting it! Listen, and make a quick decision.

Lower Range:

Still bumping along. As I said last month, rents have steadied at this level and good ones get snapped up quickly, but it seems to be steady as she goes as the winter progresses.

If I was advertising a property now, what can I expect?

Expect to be asking yourself “Where has everyone gone?”. You can reasonably expect things to be much quieter if you’re advertising a vacant property - fewer phone calls, and fewer email enquiries. Open homes on the weekends can often be a no-show, which will frustrate you, but be prepared to lower your rents.

Good luck!

managemyproperty is an independent Property Management company based in Wellington, New Zealand. Richard Horne remains a tireless and energetic investor and commentator, running an experienced eye over the property market.

Visit the website at www.managemyproperty.co.nz

Wellington Market Review - July 2011

There’s activity in the market, that’s for sure. That’s a pleasing development over last month, but it doesn’t really signal a change in what’s happening out there. I can sum it up quickly for you – quiet. It’s winter, after all.

Tenants are now expecting a lot more for their dollar, and offering a property with mould on the ceiling, ratty old curtains, tatty carpets and a turn-of-last-century kitchen and/or bathroom just doesn’t cut it. If you don’t already have a maintenance plan in place to update your property, then now is the time to start thinking that way.

What’s the Government saying?
Does anyone actually listen to what the Government is saying? Well, in the case of rental statistics, it’s always worth taking into consideration their published numbers. You’ll find them at http://www.minhousing.govt.nz/market-rent and you’ll see what properties have been renting for in your area over the past three months. It’s not ideal, but you’ll get a broad impression of rents.

What’s Happening with Advertised Rents?
Advertised rents have been steadily dropping (yes, dropping!) as vacancy times have increased. Some landlords are offering heat pumps, big screen TVs, and rent holidays to attract tenants. However, my feeling is that we are pretty close to the nadir of the rent cycle as we’re seeing investors starting to buy again since returns are improving.

Top Range:
As always seems to be the case, upper bracket quality properties are renting quietly but well, with good fair prices being achieved. Apartments in this bracket are also renting well, but there doesn’t seem to be a premium in renting a place fully furnished.

Mid Range:
More active than last month, with the emphasis on the standard of a property. A rental with a modern(ish) kitchen and bathroom, in good decorative order, will get a good rent. Let your place run down, and wave goodbye to good returns. Three bedroom houses are renting well, although townhouses have been challenging lately.

Lower Range:
Bumping along. Here is where a good return can be had for renovating one and two bedroom properties. Rents have steadied at this level and good ones get snapped up quickly, so things are starting to lift in this range.

If I was advertising a property now, what can I expect?
You can expect few calls if your rent is too high, or you have a poor advert with fuzzy pictures of the front door and the kitchen sink. You can also expect tenants to ask about whether there is heating or insulation in your rental, what the water pressure is like, and whether it comes with whiteware. Get those things sorted, and you’ll get a better result.

If you get no response, DROP THE RENT!

managemyproperty is an independent property management company based in Wellington, New Zealand. Richard Horne remains a tireless and energetic investor and commentator, running an experienced eye over the property market.

A Parable for Property Managers

This is not one of my stories but it did happen. I wish I could say such a sequence of errors is not common but a look around the industry suggests otherwise. Here is how this particular parable went:

The tenant, who we will call Shannon, received a phone call from a plumber looking to make a time to fix the leaking tiles in her bathroom. Somewhat surprised, she politely explained they must have the wrong number as she was not aware that any such work was scheduled for the flat.

Having initially dismissed the call, Shannon became concerned it was not just a garden-variety wrong number. The plumber, seemingly equally confused by her answers, did have all the correct details for the property and mentioned the correct property management company. However, Shannon knew she had not requested the work, there had not been an inspection in three months (at least that she was aware of) and she had not been notified by the property manager of any plumbing work being scheduled.

Shannon rang the large property management company to find out what was going on. The first person who answered the phone knew nothing about any plumber and advised her to ignore it entirely. Unsatisfied with that response, Shannon called again later, got a different person and heard a different story.

As it turns out, the property management company had indeed called the plumber a week or so earlier. The tile problem had apparently been noted in the inspection three months earlier. Naturally, Shannon had a few problems with this explanation:

- A near three-month delay in even calling for a plumber was way too slow, particularly if there was a serious problem involving water leaks.
- The inspection had picked up a couple of loose tiles around the shower which was what the plumber had been instructed to fix. However, it had missed the loose tile on the bathroom floor which was probably more significant.
- When Shannon asked why a more recent inspection had not occurred, the property management company replied – and I quote – “we have lost the keys. Can you drop in another set tomorrow? It’s quite urgent we have them.”

Let me sum this up gentle readers: The property management company wanted the tenant to get keys cut at her expense and then deliver them urgently because they had “lost them”, even though they took nearly three months to make one phone call which they then forgot to tell her about. That does not sound fair to me!

There was a happy ending for the tenant. She put her foot down and got the company to pick up the key and reimburse her for the expense. The plumber came in and fixed the shower and the floor. It turned out the water damage was minimal but it was useful to address the problems before they got any worse.

It was not such good news for the property management company though. Shannon has told this story to a fair few people around town over a cup of coffee or a glass of wine. You can be certain that she named the company involved.