Welcome to the thirteenth edition of the West Auckland monthly Residential Landlords Newsletter.
I am a
landlord myself and have been for over 30 years. I have recently brought
another rental investment last December in West Auckland and another in Millwater,
Silverdale in May. 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 26 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
I hope
you will find it useful. I am available for free advice and opinion on any
residential or lifestyle real estate matter.
|
Sale Prices
| |||
|
Suburb
|
Median selling price June 2015
|
No sold
|
Days to sell
|
|
Titirangi
|
$830,000
|
22
|
27
|
|
Green Bay
|
$794,000
|
6
|
34
|
|
West Harbour
|
$798,000
|
14
|
31
|
|
Glendene
|
$645,000
|
16
|
25
|
|
Henderson
|
$755,000
|
77
|
30
|
|
Hobsonville
|
$629,000
|
9
|
34
|
|
Massey
|
$692,500
|
54
|
27
|
|
Ranui
|
$619,500
|
18
|
14
|
|
Sunnyvale
|
$633,000
|
7
|
25
|
|
Swanson
|
$775,000
|
5
|
27
|
|
Te Atatu Peninsula
|
$920,000
|
18
|
27
|
|
Te Atatu South
|
$730,000
|
33
|
30
|
|
Glen Eden
|
$657,000
|
47
|
27
|
|
New Lynn
|
$568,000
|
37
|
23
|
|
Kelston
|
$697,000
|
9
|
30
|
|
Royal Heights
|
$683,350
|
12
|
30
|
|
Laingholm
|
$657,500
|
5
|
13
|
|
Current Mortgage Rates (27/08/2015)
| |||||
|
|
Float
|
1 yr fixed
|
2 yr fixed
|
3 yr fixed
|
5 yr fixed
|
|
ANZ
|
6.24%
|
4.69%
|
4.89%
|
5.59%
|
5.79%
|
|
ASB
|
6.50%
|
4.69%
|
4.89%
|
4.99%
|
5.39%
|
|
BNZ
|
5.99%
|
4.69%
|
4.69%
|
5.19%
|
5.65%
|
|
Westpac
|
6.15%
|
4.99%
|
5.19%
|
5.19%
|
5.65%
|
|
Kiwi Bank
|
6.15%
|
4.79%
|
4.65%
|
4.99%
|
5.50%
|
|
Best of other lenders
|
5.59%
|
4.49%
|
4.49%
|
4.49%
|
5.29%
|
Source
– J Goodrum – Internet search
|
Current Rents
| |||||
|
1st Feb - 31st July 15
| |||||
|
Glen
Eden
|
Average Rent
|
Bonds Paid
|
Ranui
|
Average
Rent
|
Bonds
Paid
|
|
2 brm
apartment
|
$286.00
|
5
|
2 brm
flat
|
$245.00
|
9
|
|
1 brm
flat
|
$250.00
|
5
|
2 brm
house
|
$390.00
|
9
|
|
2 brm
flat
|
$350.00
|
15
|
3 brm
house
|
$430.00
|
72
|
|
2 brm
house
|
$387.00
|
26
|
4 brm
house
|
$507.00
|
10
|
|
3 brm
house
|
$437.00
|
114
|
Royal
Heights/Massey
| ||
|
4 brm
house
|
$497.00
|
22
|
1 brm
flat
|
$245.00
|
6
|
|
Glendene
|
|
|
2 brm
flat
|
$350.00
|
13
|
|
1 brm
flat
|
$295.00
|
5
|
3 brm
flat
|
$425.00
|
5
|
|
2 brm
flat
|
$350.00
|
15
|
1 brm
house
|
$290.00
|
5
|
|
2 brm
house
|
$382.00
|
18
|
2 brm
house
|
$360.00
|
17
|
|
3 brm
house
|
$440.00
|
60
|
3 brm
house
|
$450.00
|
124
|
|
4 brm
house
|
$500.00
|
19
|
4 brm
house
|
$535.00
|
28
|
|
Henderson
|
|
|
5+ brm
house
|
$650.00
|
17
|
|
1 brm
apartment
|
$300.00
|
5
|
Te
Atatu South
| ||
|
1 brm
flat
|
$300.00
|
16
|
1 brm
flat
|
$250.00
|
7
|
|
2 brm
flat
|
$375.00
|
45
|
2 brm
flat
|
$350.00
|
17
|
|
3 brm
flat
|
$422.00
|
10
|
2 brm
house
|
$400.00
|
15
|
|
1 brm
house
|
$287.00
|
8
|
3 brm
house
|
$462.00
|
52
|
|
2 brm
house
|
$375.00
|
61
|
4 brm
house
|
$555.00
|
10
|
|
3 brm
house
|
$450.00
|
214
|
5+ brm
house
|
$695.00
|
5
|
|
4 brm
house
|
$530.00
|
83
|
Te
Atatu Peninsula
| ||
|
5+ brm
house
|
$652.00
|
22
|
1 brm
flat
|
$270.00
|
5
|
|
Kelston
|
|
|
2 brm
flat
|
$375.00
|
12
|
|
1 brm
apartment
|
$290.00
|
24
|
2 brm
house
|
$395.00
|
19
|
|
2 brm
apartment
|
$330.00
|
9
|
3 brm
house
|
$480.00
|
67
|
|
1 brm
flat
|
$310.00
|
6
|
4 brm
house
|
$595.00
|
21
|
|
2 brm
flat
|
$350.00
|
5
|
5+ brm
house
|
$570.00
|
6
|
|
1 brm
house
|
$356.00
|
17
|
Titirangi
| ||
|
2 brm
house
|
$356.00
|
19
|
1 brm
flat
|
$265.00
|
22
|
|
3 brm
house
|
$445.00
|
72
|
2 brm
flat
|
$345.00
|
6
|
|
4 brm
house
|
$490.00
|
9
|
1 brm
house
|
$307.00
|
6
|
|
5+ brm
house
|
$600.00
|
5
|
2 brm
house
|
$395.00
|
30
|
|
1 room
|
$215.00
|
8
|
3 brm
house
|
$480.00
|
81
|
|
New
Lynn
|
|
|
4 brm
house
|
$622.00
|
21
|
|
1 brm
apartment
|
$297.00
|
24
|
West Harbour
| ||
|
2 brm
apartment
|
$390.00
|
18
|
1 brm
flat
|
$300.00
|
11
|
|
1 brm
flat
|
$290.00
|
15
|
2 brm
house
|
$395.00
|
15
|
|
2 brm
flat
|
$370.00
|
67
|
3 brm
house
|
$460.00
|
90
|
|
3 brm
flat
|
$430.00
|
9
|
4 brm
house
|
$600.00
|
36
|
|
1 brm
house
|
$310.00
|
9
|
5+ brm
house
|
$700.00
|
13
|
|
2 brm
house
|
$400.00
|
39
|
Western
Beaches/Rural
| ||
|
3 brm
house
|
$460.00
|
102
|
1 brm
flat
|
$300.00
|
9
|
|
4 brm
house
|
$540.00
|
21
|
1 brm
house
|
$280.00
|
6
|
|
5+ brm
house
|
$597.00
|
6
|
2 brm
house
|
$380.00
|
38
|
|
1 room
|
$230.00
|
6
|
3 brm
house
|
$450.00
|
55
|
|
|
4 brm
house
|
$550.00
|
25
| ||
|
5+ brm
house
|
$597.00
|
6
| |||
| ||||||
|
New Lynn
| ||||||
|
Date
|
Median selling price
|
5 year gain %
| ||||
|
June 1995
|
$130,000.00
|
-
| ||||
|
June 2000
|
$181,000.00
|
39.2%
| ||||
|
June 2005
|
$284,750.00
|
57.3%
| ||||
|
June 2010
|
$352,000.00
|
23.6%
| ||||
|
June 2015
|
$550,000.00
|
56.3%
| ||||
|
Over 20 years
|
|
323.1%
| ||||
| ||||||
|
Massey
| ||||||
|
Date
|
Median selling price
|
5 year gain %
| ||||
|
June 1995
|
$119,500.00
|
-
| ||||
|
June 2000
|
$172,500.00
|
45.0%
| ||||
|
June 2005
|
$298,000.00
|
72.8%
| ||||
|
June 2010
|
$345,000.00
|
15.8%
| ||||
|
June 2015
|
$670,000.00
|
94.2%
| ||||
|
Over 20 years
|
|
463.0%
| ||||
Source
NZ department of statistics
Increasing
Your Rental Return
Your rental return is effected by:
1) The
weekly rent you are able to charge.
2) The actual
rent you collect.
3) The
vacancy rate when your property is empty.
1. The weekly rent you are able to charge:
The market will determine what rent you will be able to
charge. If you ask too much it will be left unrented. If you charge too little
then your returns will be below what they could be.
The department of building and housing publish the median
values including the lower and the upper quartiles for many suburbs for 2, 3, 4
and 5+ bedroom homes. The figures however tend to lag behind the market. For
example the current figures cover from 1/2/15 – 31/7/17. None the less they
give guide as to what rent you can expect.
If the presentation of your 3 bedroom rental is fairly
average you could expect around the median weekly rent if below then towards the
lower quartile and if very well presented then towards or even above the upper
quartile.
You can obviously increase the rent you are able to collect
by improving your rental property:
a) Insulation – under the floor and in the attic will make the property more desirable especially in winter. NB. From next year onwards prospective tenants must be advised as to what insulation level is or isn’t in a rental. From 2019 all rentals must have insulation (where practical).
b) Maintenance & Decoration - A well maintained and decorated property will be more attractive to a tenant and will commend a better rent than a poor quality rental.
c) Heat Pumps – If you install a heat pump you could expect it to be easier/quicker to rent and expect a higher rent for the property. A heat pump is of value to the tenant in winter for heating and in the summer for cooling.
a) Insulation – under the floor and in the attic will make the property more desirable especially in winter. NB. From next year onwards prospective tenants must be advised as to what insulation level is or isn’t in a rental. From 2019 all rentals must have insulation (where practical).
b) Maintenance & Decoration - A well maintained and decorated property will be more attractive to a tenant and will commend a better rent than a poor quality rental.
c) Heat Pumps – If you install a heat pump you could expect it to be easier/quicker to rent and expect a higher rent for the property. A heat pump is of value to the tenant in winter for heating and in the summer for cooling.
d) Garage or Carport – Adding a garage or carport to your
property if they don’t have one will also mean easier/faster renting and a
higher rent than without one.
e) Modernising – Updating the kitchen and bathroom in particular will increase the amount of rent that can be charged and make it quicker/easier to tenant.
e) Modernising – Updating the kitchen and bathroom in particular will increase the amount of rent that can be charged and make it quicker/easier to tenant.
2. The actual rent you collect:
This relates to tenants missing rental payments and moving
out with rent owing.
Obviously managing the rental professionally will help reduce any problems but I firmly believe that checking out the tenant properly before signing a tenancy agreement is the best way of ensuring few or no problems.
A credit check and a check on say TINZ (Tenancy Information NZ) is pretty well essential and will weed out tenants with a bad record.
(1) And (2) are closely linked. If the property is well presented, insulated, with a heat pump, has a garage or carport and is relatively modern (esp. kitchen and bathroom) then you will be able to attract good tenants and keep good tenants at an above average rent.
Obviously managing the rental professionally will help reduce any problems but I firmly believe that checking out the tenant properly before signing a tenancy agreement is the best way of ensuring few or no problems.
A credit check and a check on say TINZ (Tenancy Information NZ) is pretty well essential and will weed out tenants with a bad record.
(1) And (2) are closely linked. If the property is well presented, insulated, with a heat pump, has a garage or carport and is relatively modern (esp. kitchen and bathroom) then you will be able to attract good tenants and keep good tenants at an above average rent.
3. The vacancy rate:
It is no good having a fantastic weekly rent when the
property is tenanted but having a high vacancy rate. The net return is likely
to be below what could be achieved. Clearly the more you have checked out
prospective tenants and the more desirable the property the lower will be the
vacancy rate. If all other features are corrected and the vacancy rate is high
it suggests you are asking too much rent despite how nice the property may be.
Even $20/week can have a significant effect on a $500/week rental, for example if the current rent should be $480. In this scenario even 2 weeks extra vacancy costs you $960 and would take $960/$20= 48 weeks at $500 to make up for the 2 weeks extra vacancy. If you are a serious investor landlord treat your rentals as a business. Provide a good service = good property and market rent and you will be successful.
Even $20/week can have a significant effect on a $500/week rental, for example if the current rent should be $480. In this scenario even 2 weeks extra vacancy costs you $960 and would take $960/$20= 48 weeks at $500 to make up for the 2 weeks extra vacancy. If you are a serious investor landlord treat your rentals as a business. Provide a good service = good property and market rent and you will be successful.
Remember
property appreciates in value and capital gains will almost always be your
biggest benefit, not rents. Rents only facilitate the ownership by contributing
to the rates, insurance and maintenance of the asset which is your rental
property.
Money
spent on improving the property should not just be regarded as a cost but as an
investment that increases the value of your property.
Until
next time,
Best
wishes,
Licensee
Agent REAA 2008
021945140, 09 838 8895
Ray
White Buy West Realty Ltd
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