Being a landlord is a complicated job, made more so by these common mistakes landlords frequently make in their Wellington investment that can ending up causing more work and stress than necessary.
Not Understanding Your Legal Rights and Obligations
A big no no in the rental world yet so many landlords make the mistake of not taking the time to read and understand the Residential Tenancies Act 1986, putting them at risk in breaching their tenants’ rights and in having their own unknowingly breached by tenants.
The areas of the Residential Tenancies Act which we see most frequently misunderstood are:
Periodic Tenancy Ending
To end a periodic tenancy a landlord must provide either 42 days notice if the property has been sold or the landlord or a family member is moving in, or 90 days in any other case.
Fixed Term Tenancies
The tenancy agreement remains in force even if the property is sold – don’t give vacant possession if the tenancy still has time to run.
A landlord must provide 90 days written notice to end a periodic tenancy agreement, and can only increase rent 180 days following the agreement’s establishment or after the last rent increase, provided they give 60 days written notice.
Though it is your legal obligation as landlord to maintain the premises in reasonable condition, don’t make the mistake of not understanding your right to rent; under this Act tenants cannot legally withhold rent to get repairs completed.
Reading relevant laws can be an interesting experience and will help you learn your rights and obligations as a landlord, helping create smooth property management. To gather a better understanding of this Act, take a look at the Tenancy Services website for useful summaries.
Purchasing Inadequate Insurance
There is nothing worse than paying insurance for months and months, only to realise that it doesn’t cover you at all when you go to make a claim. Insurance policies can be full of loopholes, and landlords can face the risk of under-insuring their investment properties or accidentally using a standard insurance policy that that isn’t landlord-specific.
Check exactly what your insurance covers, insurance policies should specifically state it covers rental properties, and should insure against property damage (accidental or otherwise) and protect the property from any rent loss caused by accidental damage, abandonment, or eviction, as well as provide other rental-specific covers. Talk to your insurance company about any requirements for making claims, as some policies require landlords to prove they’ve completed a thorough tenancy selection process before honouring claims. If you’re unsure about what rental insurance policy is best for your Wellington investment property, chat to an insurance broker for more advice.
Not Conducting Regular Inspections
We’re all busy people, with family and job obligations that often take priority, it’s easy to forget to enforce tenancy agreements and place too much trust on the goodwill of tenants. Run regular property inspections every few months to not only check the property’s condition but also verify that the tenants aren’t breaching the agreement in any way, such as housing a pet despite a no animals agreement. Inspections should focus on leaks, mould, and ventilation, as well as how well the tenants are looking after the property. The most common error we see landlords make is a lack of thorough checking of the property's condition following a tenancy ending and a reluctance to claim for damage to the property.
Ignoring Property Maintenance
Neglecting property maintenance will likely create unhappy tenants and increase tenant turnover, yet this mistake is frequently repeated again and again by landlords throughout Wellington. Luckily, not all maintenance issues are costly; try removing any lingering odours with an Ozone Generator.
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