NEWS FROM PROPERTY BROKERS PROPERTY MANAGEMENT DIV IS IONI N V E S T O R I N S I D E RSeptember 2012

Increase in legislation a growing risk for Landlords

In Australia 80% of all rental properties are professionally managed by a Property Management company. In New Zealand approximately 30% of rental accommodation is professionally managed.

Why is that?

This topic is hotly debated by REINZ and there is currently a campaign to increase more managed properties. Personally I believe that this will happen and I have my own theory as to why this is.

In Australia there has been a high amount of legislation and risk of liability towards landlords. So much so that landlords do not want to carry the burden of managing their investment portfolio as they do not want the risk in getting sued. In New Zealand it has been quite the opposite. Landlords have not had the same concerns and many are uneducated as to the boundaries of the Residential Tenancies Act. This alongside the Kiwi DIY attitude has meant that most landlords are happy to manage the tenancy themselves.

I constantly hear of landlords committing unlawful acts, many are oblivious as to what they are doing and the financial risk they are putting themselves under. Changes to the Residential Tenancies Act in 2010 saw the introduction of fines for unlawful acts committed under the Act. Fines of up to $4000 can be imposed. The fact is most people are unaware of this.

What we will see is an increasing number of landlords realise that they do not want to carry this risk. I am also starting to see more and more tenants take landlords to Tenancy Tribunal for failing to maintain the property. This carries a maximum penalty of up to $3000 per breach.

Mould and dampness is a major problem for us. We are just coming out of winter and again the most common complaint we hear from tenants is “The house is too cold” or “too damp”. If a property persistently has a problem with mould and the tenant can prove they have tried to remedy the problem then the landlord will be held liable.

As more and more tenants apply to Tribunal landlords decide that they would rather put the property in the hands of someone else.

My advice to you is if you do have maintenance issues attend to them quickly. New Zealand housing is generally poor compared to the rest of the OECD. Tenants are becoming more educated and will continue to hold landlords accountable.

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Staff Profile: Steve Sheldon

Steve is one of our most decorated Property Managers. Joining the company in 2010, Steve made an immediate mark when he was short listed as a finalist in the REINZ Rookie of the Year Award for 2011 and then went on to win the Property Brokers Property Manager of the Year in the same year.

Steve recently made the final of REINZ Property Manager of the Year, 2012 where he was the only male to feature in the competition.

Favourite Food .........................MexicanFavourite Movie ..............Risky BusinessFavourite Music ............................... JazzLength of Employment ........... 2.5 yearsFavourite Drink ........... Cabernet MerlotFavour colour ...................................Blue

Biggest dislike ........................DeceptionHome Town ............................ AucklandBest thing about working with Property Brokers .........................CultureInterests ............Squash, Snowboarding

NEWS FROM PROPERTY BROKERS PROPERTY MANAGEMENT DIV IS IONI N V E S T O R I N S I D E RSeptember 2012

Win $100 Prezzie CardRecommend us to a friend and we will give you a $100 Prezzie Card for every property you refer to us.

5A Strathmore Avenue Levin2 bedrooms1 bathroomMORTGAGEE AUCTION 11/10/12Murray Doreen 027 490 4773Margrit Searle 027 455 7706

WEB ID LU26159

18 Rutland StreetLevin3 bedrooms1 bathroom$163,000 Debby Turner 027 490 4773

WEB ID LU25285

2/12 Hobson StreetFeilding2 bedrooms1 bathroomTENDER 5/10/12Ian Steele 027 441 1235Joanne Steele 027 441 1234

WEB ID FU25993

14 Andrew StreetFeilding3 bedrooms1 bathroomPrice $189,000Lianne Masters 027 288 1801

WEB ID FU24140

49 Ada StreetHokowhitu, Palmerston North3 bedrooms1 bathroomPrice $229,000+Wayne Thompson 027 490 5474

WEB ID BU25850

17 Ashford AvenueHokowhitu, Palmerston North3 bedrooms1 bathroomPrice $225,000Shelley Naylor 027 227 2262

WEB ID BU 25158

Investment Opportunities

49A Station RoadMarton2 bedrooms1 bathroomPrice $87,000Tony Hewitt 027 449 2289

WEB ID MTU12432

26 Chaucer Road SouthHospital Hill, Napier2 bedrooms1 bathroomPrice $149,000Alan Stephenson 027 410 0854

WEB ID NU24066

510 Hastings StreetNapier South3 bedrooms1 bathroomMORTGAGEE AUCTION 29/09/12Rod & Sue Fleming 027 498 9594

WEB ID NU26236

3/29 Ingestre StreetCentral City, Wanganui2 bedrooms1 bathroomPrice BEO $60,000Shona Howe 027 268 4688

WEB ID WGU2889

42 Plymouth StreetCentral City, Wanganui2 bedrooms1 bathroomPrice $119,000Shona Howe 027 268 4688

WEB ID WGU2926

7A Matai StreetCastlecliff, Wanganui3 bedrooms1 bathroomPrice $89,000Adie Davies 027 689 6171

WEB ID WGU9769

44 Birmingham Street Palmerston North3 bedrooms1 bathroomPrice $189,000+Francie Schwass 027 493 3559

WEB ID BU26482

16/520 Church StreetPalmerston North2 bedrooms1 bathroomPrice $125,000+Raewyn Easton 027 436 2600

WEB ID BU26522

13 Dublin StreetDannevirke4 bedrooms1 bathroomPrice $99,000Val Hook 027 498 8876

WEB ID DU23846

22 Victor StreetDannevirke2 bedrooms1 bathroomPrice $60,000Kerry Sutherland 027 430 6210

WEB ID DU26033

130 Cole StreetMasterton1 bedrooms1 bathroomPrice $118,000Graeme Sawyer 027 544 6884

WEB ID MU25844

22 Victor Street Dannevirke2 bedrooms1 bathroomPrice $60,000Kerry Sutherland 027 430 6210

WEB ID DU26033

4 Makora RoadMasterton2 bedrooms1 bathroomPrice $129,000Richard Saunders 027 449 7053

WEB ID MU12422

20 Stuart Crescent Masterton3 bedrooms1 bathroomPrice $136,000Richard Saunders 027 449 7053

WEB ID MU12409

40 Kummer Crescent Masterton4 bedrooms1 bathroomPrice $168,000Craig Cooper 0800 500 001

WEB ID MU12114

1/104 Alexandra CrescentHastings2 bedrooms1 bathroomPrice $125,000Jason Whitaker 027 682 5999David Scapens 027 607 7797

WEB ID HU25604

419 Huia StreetCamberley, Hastings3 bedrooms1 bathroomPrice $169,000Julie Boyes 021 409 929

WEB ID HU26075

10 Totara StreetWaipukurau3 bedrooms1 bathroomPrice $99,000Heather Whiting 021 234 5082

WEB ID WU10904

NEWS FROM PROPERTY BROKERS PROPERTY MANAGEMENT DIV IS IONI N V E S T O R I N S I D E RSeptember 2012

Around the Regions

In a new article we will provide feedback on local regions regarding the rental market and what we are seeing.

WairarapaThe South Wairarapa is one of our busiest regions with good quality properties renting very quickly. Over the last six months there have been 187 bonds lodged with an average of 31 bonds a month being lodged. Currently there are 37 properties available for rent which means it will take approximately 1 month to rent out properties. Masterton has 67 properties available to rent on Trade Me with 62 bonds lodged on average per month. We have seen a 5.48% growth in the median rent in Masterton. The average rent for a three bedroom house is $254. Keep your property tidy and it will rent quick.

Average rent for a 3 bedroom house Wairarapa

Region Rent

South Wairarapa $248

Masterton $253

HorowhenuaLevin makes up over 60% of the Horowhenua region with 80 of the 125 properties available on Trade Me are located in Levin. With an average of 90 bonds being lodged per month we recommend that investors look at better suburbs to rent. Low income areas struggle in Levin. Median rents in Levin continue to be relatively static with a small increase of 1.3% from the previous year. If you shop around you can find strong yield properties (about 8 to 9%). Based on median sale price for July of $225,000 a standard yield will be 5.3%. Average rent in the Horowhenua is $222 for a three bedroom property.

WanganuiWith our recent purchase of the Professional rent roll, our team has been extremely busy. Wanganui has an oversupply of available rental accommodation. My recommendation is to keep rent just below average price to maximise the potential of getting the property rented quickly. Also, make sure that your property looks the best. Properties that are insulated and dry are always in demand. The median three bedroom rents has increased by 4.8% over the last 12 months and the average rent for a three bedroom is $223.However, it is not all negative. The median sale price in July for Wanganui was only $161,500. Based on the average rent you can get a return of 7.2%. This is one of the best regions for a return on your investment.

RangitikeiBulls has 30 properties out of 40 properties that are available to rent. Average rent for a three bedroom property is $186. On average there are 28 properties rented a month in this region.

ManawatuPalmerston North currently has 364 properties available to rent. This is an increase of 21.3% from the late autumn early winter period. Rents are consistent with a small 2.1% growth over the last 6 months. Palmerston North is always consistently busy with an average of just under 300 bonds lodged per month. We will soon be approaching the busy student period where lots of properties will become available to rent.Feilding again remains in high demand. With ¾ of all rental

properties in the wider Manawatu region being available to rent in Feilding, we see an average of 43 bonds being lodged a month in Feilding. Good quality properties at market rent should have minimum vacancy periods. There are currently 45 properties available to rent in Feilding.

Average rent for a 3 bedroom house Manawatu

Region Rent

Awapuni West and North $274

Awapuni South and West End $308

Highbury/Westbrook $271

Hokowhitu West/Lagoon $342

Hospital $310

Kelvin Grove/Roslyn $293

Massey/Linton/Ashhurst $280

Central $302

Takaro/Cloverlea/Milson $286

Terrace End/Hokowhitu West $306

Manawatu/Feilding $259

Hawkes BayHastings is renting on average 110 properties per month with Flaxmere and Havelock North renting approximately 30 properties a month respectively. Napier is more sought after with approximately 140 properties renting per month.The highest rents are currently in Havelock North with the average rent for a three bedroom house being $356. The amount of properties available for rent is consistent between Napier and Hastings. There are just under 200 properties available in Hastings, Flaxmere and Havelock North whilst there are just under 190 properties available in Napier and Taradale.Waipukurau rents more than half the properties available in Central Hawkes Bay. There has been no change of any note in rents over the past 6 months.Average rent for a 3 bedroom house Hawkes Bay

Region Rent

Central Hawkes Bay $199

Rural Hastings $296

Flaxmere $261

Hastings $309

Havelock North $356

Napier $312

Taradale $329

TararuaThere is just over 30 bonds lodged per month in the Tararua region with over 50% of these in Dannevirke. The average rent for a three bedroom house in the Tararua region is $182. There are currently 55 properties available for rent on Trade Me in this region so make sure that your properties.. are well presented and just below market rent to give the best opportunity to let the property.This is another region where you can attract strong yields with the median sale price in Pahiatua for July was $83,000 and in Dannevirke $136,000.

NEWS FROM PROPERTY BROKERS PROPERTY MANAGEMENT DIV IS IONI N V E S T O R I N S I D E RSeptember 2012

Palmerston North Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12

Northern $280.00 $280.00 $292.00 $287.00 $287.00 $280.00 $285.00 $290.00 $282.00 $300.00 $280.00 $290.00

Hokowhitu $287.00 $300.00 $307.00 $325.00 $325.00 $297.00 $320.00 $305.00 $310.00 $325.00 $285.00 $320.00

Central $297.00 $270.00 $280.00 $280.00 $280.00 $310.00 $290.00 $310.00 $300.00 $310.00 $300.00 $290.00

Southern $275.00 $265.00 $282.00 $277.00 $277.00 $280.00 $280.00 $290.00 $275.00 $285.00 $285.00 $280.00

Hawkes Bay

Napier Central $350.00 $330.00 $330.00 $320.00 $320.00 $320.00 $340.00 $300.00 $322.00 $310.00 $322.00 $325.00

Napier South $300.00 $295.00 $300.00 $300.00 $300.00 $295.00 $290.00 $300.00 $300.00 $300.00 $300.00 $300.00

Taradale $330.00 $320.00 $312.00 $320.00 $320.00 $320.00 $330.00 $320.00 $325.00 $320.00 $327.00 $330.00

Hastings $280.00 $282.00 $272.00 $300.00 $300.00 $300.00 $300.00 $290.00 $292.00 $285.00 $300.00 $282.00

Other Regions

Wanganui $217.00 $215.00 $220.00 $220.00 $220.00 $230.00 $220.00 $212.00 $225.00 $210.00 $227.00 $220.00

Masterton $240.00 $250.00 $250.00 $255.00 $255.00 $240.00 $245.00 $250.00 $250.00 $245.00 $250.00 $250.00

Horowhenua $225.00 $225.00 $220.00 $235.00 $235.00 $220.00 $220.00 $230.00 $230.00 $220.00 $220.00 $230.00

Kapiti Coast $330.00 $330.00 $340.00 $330.00 $330.00 $330.00 $330.00 $350.00 $345.00 $340.00 $340.00 $330.00

At Property Brokers’ we welcome your comments, suggestions and feedback. You can contact us via email (below), phone, fax or mail and we will handle your enquiry promptly.

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Median rent for the last 12 months