So, you’ve just taken the plunge into the world of property investment—congratulations! Whether it’s a studio apartment in Auckland or a spacious family home in Wellington, owning a rental property is a fantastic way to build wealth over time. But now that you’ve got the keys, a thousand questions are probably running through your mind. Where do you start? How do you ensure you’re doing everything right? Relax, take a deep breath, and let’s walk through this journey together. This guide is your roadmap to navigating the often tricky terrain of being a first-time landlord in New Zealand.
Your Legal Responsibilities
Let’s face it—landlord law isn’t exactly light reading. But before you tune out, it’s important to get your head around the basics of New Zealand’s tenancy laws. Why? Because if you don’t, you could find yourself in hot water before your tenants even move in. The Residential Tenancies Act (RTA) is your go-to guide. It covers everything from how much bond you can charge to what happens if your tenant skips town without paying rent.
Important Laws in the RTA
The RTA takes a while to get through but we highly recommend familiarising yourself with the rules, especially section 45. However, we understand life can be hectic, so we’ve pulled together a quick summary of the key obligations you need to be aware of.
1. Keep the Property in Good Condition
You’re required to make sure the rental property is in a "reasonable condition" before your tenants move in and maintain that standard throughout the tenancy. This means everything from ensuring the plumbing works to fixing a leaky roof promptly. Regular inspections and prompt repairs are not just good practice—they’re legally required.
2. Respect the Tenant’s Right to Quiet Enjoyment
Your tenants have the right to "quiet enjoyment" of the property. This means they should be able to live in the property without unreasonable disturbances. You can’t just pop by unannounced, and any necessary visits (like inspections or repairs) require proper notice.
3. Meet Health, Safety, and Building Standards
You must comply with all relevant health, safety, and building standards, including the Healthy Homes Standards. This ensures that your property is safe and healthy for tenants to live in. From ensuring proper ventilation to having a reliable heating source, these standards are in place to protect your tenants' well-being.
4. Handle Abandoned Goods Properly
If your tenants leave behind any belongings when they move out, you must handle these abandoned goods according to the law. This could involve storing them safely or disposing of them after following the proper procedures. Mishandling abandoned goods can lead to legal complications.
5. Notify Tenants if the Property is for Sale
If you decide to sell your property while it’s rented out, you’re required to inform your tenants. This transparency is crucial as it affects their living situation and rights under the tenancy agreement.
6. Appoint an Agent if You’re Away
If you’re going to be out of New Zealand for more than 21 days, you must appoint a local agent to manage the property in your absence. This ensures that someone is available to handle any issues that arise and that tenants aren’t left in the lurch.
Things You Absolutely Cannot Do:
- Seize Tenant’s Goods: No matter the circumstances, you cannot seize your tenant’s belongings, even if they owe you rent. This is illegal and can lead to severe penalties.
- Interfere with Essential Services: You are not allowed to interfere with the supply of essential services like water, electricity, or gas, unless it’s necessary for safety reasons or to carry out repairs. Cutting off these services as a way to pressure tenants is strictly prohibited.
Set Clear Expectations with a Solid Tenancy Agreement
If there’s one document you need to get right, it’s your tenancy agreement. This isn’t just a formality—it’s your legal safety net. A well-crafted tenancy agreement spells out the terms of the rental, from the amount of rent and due dates to something as simple as who’s responsible for mowing the lawn. Don’t rush into this, take your time and ideally, consult with professionals to get a solid grip on industry standards.
The reason we recommend consulting a professional is because rules and expectations are always changing. For instance, while a 'no pets' rule has traditionally been seen as a reasonable clause in tenancy agreements, recent legal developments suggest this might no longer be a surefire option. A ruling by the Tenancy Tribunal allowed a tenant to keep their pets despite a no-pets clause in the lease, which has created some uncertainty for landlords.
This is why it’s essential to think carefully about what’s most important to you. Is having a pet-free property non-negotiable, or is it more of a preference? By focusing on your top priorities and being flexible where possible, you can craft a tenancy agreement that works for both you and your tenants.
Maintenance: The Never-Ending Story
Don’t, we repeat, don’t underestimate the ongoing maintenance required to keep your property in top shape. Maintaining your investment and keeping your tenants happy requires more than just fixing things when they break—it’s about being proactive and staying ahead of potential issues.
Start by setting up a maintenance schedule. Regular tasks like gutter cleaning, heat pump servicing, and routine inspections might seem minor, but they’re essential to preventing bigger problems down the road. As a new landlord, you might be tempted to handle everything yourself to save money. While it’s great to learn a few basic skills, there’s a fine line between being hands-on and getting in over your head.
Here’s the deal: sometimes, it’s worth spending a bit more to bring in the pros. Sure, hiring a professional tradesperson might cost more upfront, but it’s far better than dealing with a tenant who’s irate because their hot water has been out for days. Plus, keeping an emergency fund for those unexpected, larger issues ensures you’re not caught off guard when something serious arises
Get Yourself a Good Property Manager
Let’s wrap up with one often overlooked but game-changing tip: hire a local property manager. At first glance, managing a rental property might seem straightforward—until you’re waking up at 2 a.m. to deal with a leaky roof or chasing down tenants for overdue rent. A skilled property manager can take these headaches off your hands, handling everything from tenant screening and routine maintenance to rent collection and ensuring you’re in line with legal obligations.
Think of a property manager as your go-to expert—the person who knows the intricacies of property law, can spot a problematic tenant from a mile away, and keeps the entire operation running smoothly. They’re especially invaluable when disputes arise, navigating the complexities with the expertise that only comes from experience. For first-time landlords, hiring a property manager isn’t just a smart move; it’s a game-changer.
Conclusion
Being a landlord for the first time can feel overwhelming, but it doesn’t have to be. By taking the time to understand your responsibilities, setting clear expectations, and getting the right support, you can dodge the common pitfalls and turn your property into a successful investment.
So, there you have it—a survival guide for first-time landlords in New Zealand. Ready to dive in? With the right preparation and mindset, you’ll be well on your way to becoming a confident and capable landlord. And remember, you don’t have to do it alone. Speak to one of our local property managers today to find out how they can help start you off on the right foot.
