Starting A Tenancy: A Guide for Landlords
According to New Zealand’s 2013 census, over 30% of Christchurch households live in a rented home, a number that matches the nationwide average. With the large number of people renting homes each year, it’s important that certain processes are followed to ensure a fair arrangement for tenants and landlords alike. The laws that protect landlords and tenants are set forth in the Residential Tenancies Act.
At Irelands we have worked with many clients who are beginning a tenancy for the first time. Our work has given us perspective into the challenges faced by both first-time tenants and first-time landlords. We’ve put together this guide for anyone who is looking to rent out their property for the first time. This guide outlines the general process we recommend following as you prepare to rent out your property for the first time.
1. Sort out the logistics
There’s a lot to think about when renting your property. At a minimum, you’ll need to:
- Set up a separate bank account to deposit rent monies
- Take out the right type of insurance for the property
- Determine how much rent you’ll charge.
2. Set up relationships
During the tenancy screening process and after the property has been rented, there are outside people and agencies you may need to be in contact with. For example, you’ll need to know how and where to obtain a credit report to ensure tenants have good credit. After the property is rented, you’ll need reliable tradesmen that you can call on to deal with property emergencies and regular maintenance. If you take the time to set up these relationship in advance, you can react more quickly as needs arise.
3. Get your property ready
Before you begin showing the property to prospective tenants, your property needs to be in move-in ready condition. Ensure that the property is clean, freshly painted and gives off the right impression. Don’t neglect the outside – the grounds and gardens are the first thing tenants see so it’s important that they look good. Ensure that you finish all maintenance and repair work before showing the property. Once a lease is signed, it’s your legal responsibility to ensure tenants can move into the property on the move-in date.
4. Get your paperwork together
The Residential Tenancies Act requires landlords and tenants to complete 3 forms to make a tenancy official. These are:
- Application form for prospective tenants
- Tenancy agreement form
- Bond lodgment form
Have these ready to go so you’re not scrambling when you find your perfect tenants! Tenancy Services provides templates for each of these forms on their website,
5. Advertise your property
Post your rental property on TradeMe or local papers. Be sure to provide accurate details about your property including size, condition, location, any restrictions (i.e. pets permitted) and rental price. It is highly recommend that you include photos of the property in the advertisement. We encourage you to have professional photos take of your property, as these will show your unit in the best light.
6. Meet with prospective tenants
Hopefully your phone will start ringing and you’ll be able to book several appointments with prospective tenants. Take the time to meet with them and show them the property – it’s a good way to get to know your tenants and see if they are a good fit. Tenancy Services provides a useful guide to help you choose the right tenant. This includes checking references and performing a credit check.
7. Select your tenant and get them moved in
Once you find the right tenant, you should ensure that there is no legal reason that prevents them from moving into your property on the day the tenancy starts. This is called ‘vacant possession’ and essentially means that the property must be empty, clean and adequately prepared to receive your new tenants.
8. Give your tenancy a good start
Just like any relationship, there are things you can do to ensure the relationship with your tenant is a healthy one. We recommend performing a thorough property inspection with your tenants on move-in day. This is your chance to document the condition of the property and answer any questions the tenant may have. Be sure that your tenant as your contact details and be responsive when they call with questions or problems.
Want some help?
The New Zealand government has done a great job of putting together resources for landlords and tenants on the Tenancy Services website. We encourage you to browse through their Starting a Tenancy articles to get more detailed information and to ensure you understand your rights and responsibilities as a landlord.
Many landlords find it too time-consuming to deal with renting out their property, especially if they are just starting out. At Irelands, our experienced property managers handle the entire new tenancy process, so our landlords can focus their time and energy on more important matters. If you’re interested in working with us to rent out a property for the first (or 20th!) time, please get in touch today.
Photos
Mortgage by Investment Zen, CC BY 2.0
3D Realty Handshake by Scott Maxwell, CC BY-SA 2.0