Frequently Asked Questions: Landlords

Much of the success of investing in residential property lies in securing reliable tenants and ensuring that you are getting as much rent as possible. That’s where EVES Property Management comes in. We care for your property like it’s our own while ensuring you get the best return on your investment. With local expertise and a dedicated approach, we’re here to help every step of the way.

If you are thinking about becoming a landlord, check out our frequently asked questions below.

2. How do I determine the right amount of rent to charge?

Setting the right rent amount involves researching current market trends in the local area, while taking into consideration the property's location, size, condition, and amenities. It's important to balance competitive pricing with your investment goals to attract and retain quality tenants. Our experienced property managers can provide a detailed market analysis, with a recommended rental amount. You can request a free rental appraisal here.

3. What is a bond, and how much is this?

A bond is a predetermined sum of money paid by the tenant at the beginning of the tenancy. This amount must be lodged at the Bond Centre within a certain timeframe and is securely held by the Bond Centre at Tenancy Services throughout the duration of the tenancy. The bond acts as security for you, the landlord, against potential damage to the property or unpaid costs including rent.

Typically, the bond amount is the equivalent of four weeks' rent. This must be returned to the tenant at the end of the tenancy, provided there are no damages or outstanding costs or rent.

4. Who is responsible for utilities and council rates?

Generally, tenants are responsible for paying for utilities like electricity, gas, and internet, unless otherwise agreed upon in their Tenancy Agreement. Water rates will be charged directly to the landlord by the local council. The property manager can then bill the tenant for the required amount to reimburse the landlord. 

5. What happens if the tenant is late paying rent, or misses a payment?

If a tenant is late paying rent, the property manager will work with the tenant to get the rent paid on time and ensure no payments end up being missed. Tenants are encouraged to set up automatic payments through their bank to ensure they pay consistently and on time.

If issues persist, and the tenant continues to be late paying or falls into arrears (owing less than 21 days rent) the property manager can issue them with a 14 day notice to remedy. If the tenant owes 21 days of rent or more, the property manager can apply to the Tenancy Tribunal for termination of the tenancy. Our property management team can handle these situations professionally and in compliance with legal standards.

6. Can the rent be increased during the tenancy?

Yes, this includes both fixed and periodic tenancies. Your property manager will conduct annual rent reviews to ensure your investment property is still receiving optimal rent in the current market. If a rent increase is required, tenants will be given at least 60 days' written notice, in accordance with New Zealand Tenancy Law. Rent increases can only occur once in a 12 month period.

8. How are tenant disputes handled?

Handling tenant disputes involves clear communication, understanding the legal rights and responsibilities of both parties, and often mediation. If disputes escalate, the EVES Property Management team will represent you in Tenancy Tribunal hearings. Such occurrences are rare, but our team are experienced and well-versed in tribunal proceedings, and will help mitigate and professionally manage any disputes.

9. What insurance do I need as a landlord?

Landlords need to have their investment property insured with cover specific to rentals. Some premiums can also cover things like loss of rental income, vacancy periods or tenant damage. Tenants should have their own insurance for things like contents and liability.

10. Why should I choose EVES for property management?

Choosing to engage the services of an EVES Property Manager ensures that your investment is managed by knowledgeable and experienced professionals. We stay abreast of all legislative changes, offer comprehensive tenant screening, maintain proactive property maintenance, and handle all administrative tasks associated with property management. Our expertise in the market positions us as leaders, making us the best choice for managing your investment.

Leaving your property in our capable hands will also save you time, as managing your own investment involves a huge amount of work, and can be stressful.

11. What does a property manager take care of?

A property manager handles a wide range of tasks to ensure the smooth operation of your investment. This includes marketing your property, screening potential tenants, tenancy agreements and documents, conducting routine inspections, managing repairs and maintenance, collecting rent, and handling tenant disputes. Property managers also ensure compliance with all relevant laws and regulations.

12. Why is it better to use a property manager than manage my property myself?

Using a property manager offers several advantages:

• Professional expertise: Property managers are well-versed in property legislation, regulations, and market conditions, which helps in making informed decisions.
• Efficiency: They have systems and processes in place for tenant screening, rent collection, and maintenance issues, ensuring that all aspects are handled efficiently.
• Stress reduction: Managing property can be stressful, especially when dealing with difficult tenants or legal issues. A property manager relieves this burden.
• Maximised profitability: Their experience in setting appropriate rental rates and marketing strategies can help you achieve higher occupancy rates and reduce turnover, maximising your rental income.

13. Are property managers responsible for all repairs and maintenance issues?

Property managers are generally responsible for addressing routine repairs and maintenance issues as part of their management duties. They are the first point of call for tenants, day and night, and coordinate with tradespeople, manage the repair budget, and ensure that repairs are completed in a timely and cost-effective manner.

14. How can I terminate my agreement with a property manager?

Terminating an agreement with your property manager involves reviewing your management contract to understand any terms regarding notice periods and termination procedures. Typically, you must provide written notice within the specified time frame. If you are dissatisfied with the property manager's service, it's also advisable to discuss the issues with them or their management first, as they may be unaware of the issues and willing to make necessary adjustments.

15.  What happens if the tenant damages the property? If a tenant damages the property, the process typically involves several steps to resolve the issue and recover costs:

Assessment: The property manager will assess the damage and determine whether it goes beyond normal wear and tear.
Notification: The tenant is notified of the damage and the need for repairs, providing them with an opportunity to either make the repairs themselves or agree to cover the costs.
Repair: If the tenant does not address the damage, the property manager arranges for repairs to be made.
Documentation: All communications and repairs are well-documented in case further action is needed, such as claims against the bond or legal proceedings.
Bond Claim: A claim against the tenant's bond can be filed with the Bond Centre, to deduct the cost of repairs.
 

16. How are property management services charged?

Property management services are typically charged in one of several ways:

1. Percentage of Rent: The most common fee structure is a percentage of the monthly rent, usually ranging from 8% to 12%, depending on the type of services offered. This fee might cover the day-to-day management of the property, tenant screening, rent collection, maintenance calls, and regular inspections.
2. Setup or Admin Fee: An initial setup fee may be charged when you first enlist a property manager. This covers the cost of initial property inspections, creating a management plan, and setting up tenant agreements.
3. Leasing Fee: This is typically a fee charged for each new tenancy that covers the cost of the initial set up and finalisation at the end of the tenancy. This also includes marketing the property, showing it to potential tenants, credit and reference checks and preparing lease documents.
4. Maintenance Markup: Property managers may also charge a markup on repair and maintenance services coordinated on behalf of the landlord.
5. Eviction Fee: If a tenant needs to be evicted, some managers charge an additional fee to cover the cost of the legal process.

17. What tax expenses can be claimed back on investment properties?

Landlords can claim a variety of tax-deductible expenses related to the management and maintenance of their investment properties, which can significantly reduce their taxable income. Common deductible expenses include:

1. Interest on Loans: Interest paid on a mortgage or other loans for the property may be deductible if you qualify for an exemption from the interest limitation rules.
2. Depreciation: You can claim depreciation on the cost of fittings and fixtures like appliances and carpets (you can’t claim on land and buildings).
3. Repairs and Maintenance: Costs for repairs and maintenance to keep the property in good condition are typically deductible.
4. Property Management Fees: Fees paid to property management services are fully deductible.
5. Insurance: Premiums paid for building, contents, and landlord insurance are deductible.
6. Council Rates and Land Taxes: Payments made for council rates and land taxes can be claimed.
7. Travel Expenses: Travel costs for property inspections or maintenance can sometimes be claimed.

It's important to keep detailed records of all expenses as proof for tax purposes and consult with your accountant to ensure compliance with NZ tax laws and to maximise your tax benefits.

Are you looking for expert help managing your investment property? Get in touch with EVES Property Management today! 

**The above information is intended as a guide only and landlords are encouraged to conduct their own due diligence in consultation with their property manager.