Hello,
Welcome
to the fifth edition of the West Auckland monthly Residential Landlords
Newsletter.
I am a
landlord myself and have been for over 30 years. I currently own rental
properties in South Auckland, the North Shore and West Auckland. Being a high
preforming Real Estate Agent (top 1% in New Zealand) for over 25 years and always
working in West Auckland I know the real estate market and the rental market
very well.
In this
and ongoing newsletters I hope to provide ongoing up to date information
relevant to landlords who own rental properties in West Auckland. Regular
features will include:
- Current sale prices
- Current mortgage rates
- Current rents
- A monthly suburb spotlight review
- A relevant feature article each month
|
Sale Prices
| |||
|
Suburb
|
Median selling price September 2014
|
No sold
|
Days to sell
|
|
Titirangi
|
$ 639,000.00
|
19
|
33
|
|
Hobsonville
|
-
|
-
|
-
|
|
West Harbour
|
$ 632,000.00
|
14
|
30
|
|
Glendene
|
$ 479,600.00
|
12
|
28
|
|
Henderson
|
$ 560,000.00
|
65
|
27
|
|
Massey
|
$ 467,500.00
|
30
|
28
|
|
Royal Heights
|
$ 660,000.00
|
8
|
21
|
|
Ranui
|
$ 431,750.00
|
20
|
27
|
|
Sunnyvale
|
$ 447,500.00
|
3
|
27
|
|
Green Bay
|
$ 610,000.00
|
5
|
53
|
|
Te Atatu Peninsula
|
$ 695,000.00
|
15
|
23
|
|
Te Atatu South
|
$ 600,000.00
|
23
|
35
|
|
Glen Eden
|
$ 500,000.00
|
37
|
30
|
|
Kelston
|
$ 562,000.00
|
5
|
24
|
|
New Lynn
|
$ 445,000.00
|
27
|
33
|
Current Mortgage Rates 28/10/2014
|
|||||
Float
|
1 yr fixed
|
2 yr fixed
|
3 yr fixed
|
5 yr fixed
|
|
ANZ
|
6.74%
|
6.15%
|
6.39%
|
6.49%
|
6.99%
|
ASB
|
6.75%
|
6.09%
|
6.40%
|
6.65%
|
6.99%
|
BNZ
|
6.74%
|
5.89%
|
6.39%
|
6.59%
|
6.99%
|
Westpac
|
6.59%
|
6.09%
|
6.39%
|
6.65%
|
6.99%
|
Kiwi Bank
|
6.65%
|
5.99%
|
6.19%
|
6.65%
|
6.79%
|
Best of other lenders
|
5.65%
|
5.59%
|
5.75%
|
5.75%
|
6.49%
|
| Current Rents | ||
| 1st Mar - 31st Aug 14 | ||
| Glen Eden | Average Rent | Bonds Paid |
| 1 Brm Appartment | $ 219.00 |
5
|
| 2 Brm Appartment | $ 304.00 |
5
|
| 1 Brm flat | $ 240.00 |
8
|
| 2 Brm flat | $ 316.00 |
27
|
| 3 Brm flat | $ 390.00 |
6
|
| 2 brm house | $ 352.00 |
30
|
| 3 brm house | $ 414.00 |
108
|
| 4 brm house | $ 526.00 |
18
|
| Glenene | ||
| 1 Brm flat | $ 295.00 |
5
|
| 2 Brm flat | $ 337.00 |
15
|
| 2 brm house | $ 369.00 |
17
|
| 3 brm house | $ 419.00 |
63
|
| 4 brm house | $ 493.00 |
18
|
| Henderson | ||
| 1 Brm Appartment | $ 270.00 |
7
|
| 2 Brm Appartment | $ 403.00 |
9
|
| 3 Brm Appartment | $ 418.00 |
5
|
| 1 Brm flat | $ 290.00 |
24
|
| 2 Brm flat | $ 329.00 |
43
|
| 1 brm house | $ 300.00 |
9
|
| 2 brm house | $ 375.00 |
49
|
| 3 brm house | $ 429.00 |
224
|
| 4 brm house | $ 513.00 |
103
|
| 5+ brm house | $ 579.00 |
10
|
| 1 room | $ 273.00 |
10
|
| Kelston | ||
| 1 Brm Appartment | $ 280.00 |
16
|
| 1 Brm flat | $ 277.00 |
15
|
| 2 Brm flat | $ 334.00 |
15
|
| 3 Brm flat | $ 400.00 |
6
|
| 1 brm house | $ 261.00 |
5
|
| 2 brm house | $ 360.00 |
27
|
| 3 brm house | $ 424.00 |
55
|
| 4 brm house | $ 466.00 |
15
|
| New Lynn | ||
| 1 Brm Appartment | $ 262.00 |
22
|
| 2 Brm Appartment | $ 332.00 |
12
|
| 1 Brm flat | $ 267.00 |
7
|
| 2 Brm flat | $ 337.00 |
50
|
| 3 Brm flat | $ 392.00 |
9
|
| 2 brm house | $ 365.00 |
33
|
| 3 brm house | $ 441.00 |
87
|
| 4 brm house | $ 538.00 |
24
|
| 1 room | $ 199.00 |
8
|
| Ranui | ||
| 2 brm house | $ 359.00 |
13
|
| 3 brm house | $ 408.00 |
74
|
| 4 brm house | $ 489.00 |
10
|
| Royal Heights/Massey | ||
| 2 Brm flat | $ 329.00 |
14
|
| 2 brm house | $ 362.00 |
25
|
| 3 brm house | $ 414.00 |
144
|
| 4 brm house | $ 464.00 |
38
|
| 5+ brm house | $ 567.00 |
9
|
| Te Atatu South | ||
| 1 Brm flat | $ 282.00 |
9
|
| 2 Brm flat | $ 356.00 |
20
|
| 2 brm house | $ 372.00 |
18
|
| 3 brm house | $ 444.00 |
65
|
| Te Atatu Peninsula | ||
| 1 Brm flat | $ 255.00 |
6
|
| 2 Brm flat | $ 338.00 |
5
|
| 2 brm house | $ 369.00 |
20
|
| 3 brm house | $ 454.00 |
63
|
| 4 brm house | $ 526.00 |
18
|
| Titirangi | ||
| 1 Brm flat | $ 308.00 |
10
|
| 2 Brm flat | $ 346.00 |
6
|
| 1 brm house | $ 304.00 |
5
|
| 2 brm house | $ 401.00 |
26
|
| 3 brm house | $ 465.00 |
68
|
| 4 brm house | $ 549.00 |
20
|
| 5+ brm house | $ 720.00 |
6
|
| West Harbour | ||
| 1 Brm flat | $ 289.00 |
7
|
| 2 brm house | $ 374.00 |
16
|
| 3 brm house | $ 458.00 |
81
|
| 4 brm house | $ 617.00 |
37
|
| 5+ brm house | $ 695.00 |
16
|
| Western Beaches/Rural | ||
| 1 Brm flat | $ 291.00 |
7
|
| 1 brm house | $ 282.00 |
6
|
| 2 brm house | $ 379.00 |
33
|
| 3 brm house | $ 464.00 |
56
|
| 4 brm house | $ 536.00 |
24
|
| 5+ brm house | $ 583.00 |
8
|
| 1 room | $ 177.00 |
7
|
|
||||||
Royal Heights
|
||||||
Date
|
Median selling price
|
5 year gain %
|
||||
Aug 1994
|
$ 145,000.00
|
|||||
Aug 1999
|
$ 215,500.00
|
48.6
|
||||
Aug 2004
|
$ 375,500.00
|
74.2
|
||||
Aug 2009
|
$ 437,500.00
|
16.5
|
||||
Sep 2014
|
$ 660,000.00
|
50.9
|
||||
Over 20 years
|
355.2%
|
|||||
|
||||||
Ranui
|
||||||
Date
|
Median selling price
|
5 year gain %
|
||||
Aug 1994
|
$ 96,000.00
|
|||||
Aug 1999
|
$ 171,000.00
|
78.1
|
||||
Aug 2004
|
$ 261,000.00
|
34.5
|
||||
Aug 2009
|
$ 287,500.00
|
10.2
|
||||
Sep 2014
|
$ 431,750.00
|
50.1
|
||||
Over 20 years
|
349.7%
|
|||||
Property Manager or
Manage Yourself?
There
are a lot of benefits having your rental property / s managed by a specialist
property manager. Like most things however there are a number of disadvantages
too.
The
major advantage to the landlord is the hassle of dealing with the tenants and
minor ongoing maintenance issues are taken care of by the property manager. The
major disadvantage of course is the cost. This can be anything from 5% - 8.5%
of the rent plus other charges such as regular inspection fees.
There
are usually charges added on for arranging and overseeing repairs and maintenance
too and fees for attending any tenancy tribunal hearings. It can all add up to
quite a slice of the rent. The major disadvantage of the system run by most
property management companies in my opinion are that the more of the landlord’s
money they spend the more fees they earn.
Another
disadvantage of the system is that the property manager gets a letting fee
(usually a week’s rent paid by the tenant) every time the tenancy changes so
there is almost an incentive to have the tenants move. Note if the management
fee is 8% of the rent then the letting fee is equivalent to 12 ½ weeks management
fees so it is not a big worry to the property manager if there are a few weeks vacancy
between tenants but it is a serious cost to the landlord.
Another
thing to bear in mind is that not all property managers have the same standards
with regards to what is satisfactory in terms of the tenant looking after and
keeping the property clean. This can vary enormously from manager to manager. I
had a number of properties managed for a period of time and only got quarterly
inspection reports saying the properties were in good condition and being well
looked after by the tenants.
Since I
had not seen a few of them inside for about 1 ½ years I decided to accompany
the property manager to the next inspections. I was shocked at how badly they
had deteriorated since I last saw them. What that property manager regarded as
well looked after was totally different to my expectation. I know of landlords
paying for inspections that never actually took place too. Again not all
property managers are diligent and professional.
The
turnover of property managers is very high. It is a difficult job constantly
dealing with grumbling tenants and having to chase up overdue rent. The landlord
too, may not be happy with the service and is not keen to constantly be paying
for repairs and maintenance. As result the work can be very stressful and not
many property managers stay in the job or with the same company for a long
time.
For the
landlord this means a constant change of personnel who look after their
property. When things are found not to be as they should be it always seems to
be the fault of the previous person who was managing the property. When a
property does become vacant and it is not quickly rented, I find when the
landlord applies pressure on the manager to have it let many are too quick to
suggest lowering the rent.
Think
this through for a moment if the rent is reduced by say $20 per week then that
is $20 x 26 weeks = $520 loss of rent before a rent rise can occur. The loss to
the property manager is (even at max 8.5%) $520 x 8.5% = $44.20 over 6 months.
Some property managers are slow to advise landlords that the rent is due an
increase when that is possible and perhaps warranted on a rising rental market.
On the
other hand there are a few other advantages to having your rental property
managed. The landlord’s annual accountant’s fees may well be lower as monthly
statements and annual statements should be provided for each rental property to
the landlord making the accountants work minimal. A professional property
manager should have a good knowledge of the residential tenancy act and what a
tenants and landlords rights are. Many unwitting landlords have ended up paying
compensation for infringing the rights of tenancy – and it can be costly.
Dealing
with lots of properties Property Managers have many trades’ people as contacts and
as a result they often get speedier attention than would an individual landlord.
The Property Manager may be looking after dozens or even hundreds of properties
therefore they are a good client for the tradesperson to look after.
Tenancy
applications can usually be checked out by a property manager more vigorously than
a landlord by using the industries data base of bad risk tenants- bad credit
records, evicted from previous tenancy or left owing rent or left a damaged and
/ or dirty property.
So what is best? Manage
yourself or use a property manager?
For the new landlord
with little experience I would recommend using a property manager. Having said
this ask around and find a good one then check up on your chosen property manager
regularly. Attend one regular periodic inspection together with the property
manager at least once per year. Keep an eye on rents in the area, go to my
monthly newsletter: http://johngoodrum.co.nz/blog/
Look at rentals to let
on http://www.realestate.co.nz/ and http://www.trademe.co.nz/property to keep up with market rental
conditions. If you choose to manage yourself make sure you study the
Residential Tenancies Act 1986 www.legislation.govt.nz and visit Tenancy Information for
landlords also at www.dbh.govt.nz/residentialtenancies-index
It’s your choice but
hopefully you are now a little more informed.
P.S. So is it worth
being a landlord at all? You bet it is. Remember properties double in value or
more every 10 or so years.
Until
next time,
Best
wishes,
John
Goodrum
Licensee
Agent REAA 2008
021945140
09 838 8895
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