HCNZ Rental Appraisal

[WGN ex-property manager]

The rent review is annual. i will investigate whether we can use a Property manager as a comparison. Thanks for that.

Don't ask, just do it... if the numbers come back in your favour, ring HCNZ and politely discuss with them how to remedy their erroneous rental appraisal.

Assume you are right until proven otherwise. The worst that can happen is you get what you have now.

"I think I'm right, can you prove me wrong?", but gently handled.

[Alayne]

The rent review is annual. i will investigate whether we can use a Property manager as a comparison. Thanks for that.

[Alayne]

HNZ use a valuer of their choice. We pay half the cost, and although they send a report it is very basic, and does not contain any comparitive statistics. Last year it was stated that they did not visit the property, just did an observation from the street. From our own observations of rents in the area (Taupo) and reading the DBH stats, we feel the rent is about $10 lower than the market would suggest.

[WGN ex-property manager]

My understanding is that you can get a Property Manager to give you a rental assessement and take this to HCNZ. If they disagree, they get their assessment and you negotiate something in the middle.

In Wellington rents are bouncing around quite a bit at the moment. Most valuers are using DBH stats to give rental estimates, which are a: out of date. b: diluted by amateur landlords significantly under-renting their property.

So Market Rent is not the same as Median Rent. An experience PM will really know the market rate, as they are writing rental assessments THAT THEY HAVE TO DELIVER TO for their clients every week.

Many PMs will give you a free assessment (as they might pick up the management if you and HCNZ can't reach an agreement).

[spurner]

I wouldn't worry about $10pw, and the 10% management fee is what a private company would charge anyway (including all their extra fees).

Think of it this way - If you take over management yourself and have just one bad tenant in the next 5 years or so you could be left thousands of dollars out of pocket in rent arrears or repairing damage, which would wipe out all your potential savings.

What does the lease say regarding rental reviews? It seems unusual that only 1 company has the say over what the rent can be, and HNZ get to choose that company. But then again, HNZ are in a position to be choosy.

We have a property that is leased to Housing NZ and our 5 year lease is due to expire later this year. We are wondering whether to renew it as although we do not have to worry about finding tenants and the rent is quaranteed, we feel we are getting at least $10.00 pw below market rent and paying 10% property management fees on top. Rent is only reviewed annually and by the company HNZ recommend, and we now have to pay half the rent assessment fee. Property inspections may be done, but we never get any reports, and only hear from HNZ if there is a repair needed, which is rare as we keep it in really god condition. I'd appreciate others thoughts on HNZ leasing.

[WORKING BEE]

Alayne who are you referring to here?

"Rent is only reviewed annually and by the company HNZ recommend"

Do HNZC not set rents due to market rent statistics taken from the Department of Building and Housing?

The valuer that I have utilised for some years now does a lot of these rental recommendations for HCNZ, within a particular area of course. He supplied me with a couple of market rent print outs from the Dept of Building and Housing (www.dbh.govt.nz). They outline 1,2 and 3 bedroom house and flat rents and 4 bedroom house rents with columns for lower, median and upper quartile rents outlined along with averages and standard deviations. So, you can get a feel for what the good and not quite so good properties are achieving in particular areas which is handy for you as a landlord I guess. It does appear however that although this information is utilised for assessments that ultimately it is the valuer that HCNZ chooses that seems to make the rental level recommendation to them.

[SJO4]

Alayne,

It appears that there is a renewal provision in the lease. If there is a renewal provision then you as the Landlord have no choice but to accept a renewal of the lease if HNZC wishes to exercise the renewal. The renewal provision is inserted for the sole bennefit of the tenant (HNZC).

You need to contact your property manager to ascertain there decision. The lease should have notice terms specifying (normally three months before expiry of term) when the tenant must provide notice of its intention to renew the lease.

Generally HNZC leases are a hassel free tenancy. With regards to repairs the lease specifies HNZC obligations. You should ensure that HNZC is requiring you to undertake repair work which is ultimately their responsibiliy.

[annaspanna]

We have a property that is leased to Housing NZ and our 5 year lease is due to expire later this year. We are wondering whether to renew it as although we do not have to worry about finding tenants and the rent is quaranteed, we feel we are getting at least $10.00 pw below market rent and paying 10% property management fees on top. Rent is only reviewed annually and by the company HNZ recommend, and we now have to pay half the rent assessment fee. Property inspections may be done, but we never get any reports, and only hear from HNZ if there is a repair needed, which is rare as we keep it in really god condition. I'd appreciate others thoughts on HNZ leasing.

Alayne who are you referring to here?

"Rent is only reviewed annually and by the company HNZ recommend"

Do HNZC not set rents due to market rent statistics taken from the Department of Building and Housing?

[WORKING BEE]

Hi. I have had 3 meetings recently with HCNZ regarding the option of leasing residential property from me.
Firstly, they have pretty strick standards now. Then depending on the area they may only want 2 b/rooms or 4/ b/rooms. But what they have stated to me is that they will sign 10 years + 5 year ROR (right of renewal) leases which obviously give a 100% occupancy rental gaurantee.
But yes...they clip 10% off of the rental. However, if you think about that logically...10% is 5.2 weeks of any given year, so one has to weigh up whether the certainty of cashflow from HCNZ is the preferred option (personally I think it is although this is utterly dependent on the property situation and so many other variables).

[Alayne]

Housing NZ lease

We have a property that is leased to Housing NZ and our 5 year lease is due to expire later this year. We are wondering whether to renew it as although we do not have to worry about finding tenants and the rent is quaranteed, we feel we are getting at least $10.00 pw below market rent and paying 10% property management fees on top. Rent is only reviewed annually and by the company HNZ recommend, and we now have to pay half the rent assessment fee. Property inspections may be done, but we never get any reports, and only hear from HNZ if there is a repair needed, which is rare as we keep it in really god condition. I'd appreciate others thoughts on HNZ leasing.

[muppet]

Hi Samuri

I made enquiries two years ago.
This is the group who I was dealing with. Whether they still exist, I don't know.

NZ Invest
Adrienne Grey
09 302 0664, fax 09 302 0665 m 021 648 601
[email protected]

Level 11, Union House, 132-138 Quay Street, Auckland
PO Box 1790 Shortland Street

Regards

[Glenn]

Nelson is at long last recognised as a high cost problem place for rentals.
We have for many years had one of the lowest owner-occupied percentages in the country.

The percentage of HNZ houses is, I understand to be, lower compared with the number of privately operated rentals (currently 6000 rentals in Nelson urban area).

Have you noticed how the current Government seems to have a love affair with providing assistance in areas where their support base is strongest?

I have a really good working relationship with HNZ in Nelson and I send them all of my vacancies so they can send applicants my way when they are unable to help them and I have something to let.

I have been really fascinated to find that with the recently introduced and planned increases in accommodation supplements it is possible to rent a privately provided house at a lower cost than one off HNZ.

As for the name of the developer. Well yes I do know them fairly well.
You could try looking in the yellow pages under "T"
I am not aware that "this" firm has any better deal with HNZ than anyone else.

[samuri]

Do you have the developers details.
How does Nelson compare to other locations around NZ......in your opinion a syou are a resident there

[Glenn]

Yes I know of at least one developer in Nelson who is doing that.
I attend a housing forum that HNZ attends.
They say they have "no limit" placed on them on the number of properties that they will lease.

[samuri]

Sorry but I dont understand........more details pleae
a web search came up nought , except in UK