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  • Life as a Landlord

    Like a lot of Kiwis I’m rather glad that 2011 is over and pleased that I have survived the visictudes it bought.

    Traditionally, December is a quiet month in the Landlording business but apparently no-one told the 2011 fairy. Mix one tenant dying, one departing and one leaving under duress and add in negotiations to buy another property. Roller-skate time.

    The middle unit of my partner’s St Lukes three-unit block has been rented to an elderly Chinese couple for several years. Although their grasp of the English language has been minimal, they have been good tenants and any negotiations have been assisted by the translation skills of their daughter.
    However, all things change and the wife died a short while ago leaving the husband a bit stranded on his own. It was logical that he should go and live with his daughter and her family, so we were given notice of termination of the tenancy set for mid-December.

    By arrangement, we checked the property inside and out the week prior and arranged for Jan the handywoman to do the necessary touch-up work over the two days right after termination. Just a repaint of the ceilings and rehanging some venetian blinds.
    They had been paying $285 a week, and our initial thoughts were a new rent of $330. However, after a check of similar listings on TradeMe we decided to try for $360. We lodged the listing at 9pm on the Monday night, and had our first phone call at 9.20. By midday on Tuesday we had four other enquiries, and arranged to meet them on Wednesday morning.

    The first to see was a Lebanese woman with family who is working at the St Lukes shopping complex. She signed up on the spot with no quibble about the rent level. References checked, she moved in the following weekend, so that’s a nice little income increase for the New Year.

    Meanwhile, back over at Manurewa, I’ve been having problems with a low-level tenant. The rent has been paid directly from WINZ, but the non-payment for water used has resulted in a mediators order. This naturally has been ignored, so I have been chasing her along a bit.
    A drive-by early in the month showed the house locked up, and of course no rent arrived the following Monday. I was back out to the property with an inspection notice taped to the door like a shot, and still no response.
    The following Monday she did call, apparently from a phone at Auckland Hospital, and she promised to meet me there that afternoon.
    Did not show, as I expected, so the next step was a locksmith to force entry the following morning. It’s always a bit iffy going into a house like this – you never know if you are going to find a body or a cannabis plantation.
    No-one in residence, and some evidence of a hurried departure. Clutter left lying around and no cleaning up had been done.
    I spent some hours stacking all the abandoned possessions on to the dining room vinyl so that the carpets could be cleaned, and then we listed the damage.
    One wardrobe door off its hinges, quite a few stains on walls, damage to the toilet cistern and in the bathroom, that sort of thing.
    Jan did her work over four days, while I took the opportunity to wash down the exterior of the house.
    The rental agents that I use in Manurewa listed the property at $360 a week, $10 more than the last let, and found suitable tenants in a few days so the demand is certainly there even at this time of the year.
    I have filed for a one party claim on the bond, and as she was on a fixed-term tenancy she will still owe me one weeks rent plus around $800 for the damage repair, cleaning and the locks.
    She’ll be hearing from me in January.

    In my Manurewa block, one of the tenants there fell behind with their rent. They did arrange to catch up by paying an extra $60 a week, but gradually fell back again.
    Eventually I did strongly suggest that they go, and they agreed. Departure date came, and “please could we stay just a few extra days”.
    When they did move out, no contact address was given and again, with a fixed term tenancy involved, they owe me around the $500 mark.
    It’s all very well to say that tenants are tied in with these fixed term tenancies, but they can still walk away if they want to.
    As this tenancy has been fairly short term, a coat of paint over the walls in the bedrooms was all that was needed in that one.
    Again, the agents have supplied a new tenant at a $5 a week increase.

    In amongst all of this, I have been negotiating for another Manurewa house next door to one I already own. A 1970s three-bedroom place with road frontage on a cross-lease section, the owners had listed it several months ago at $238,000.
    I let it sit for some time, as I knew they would get no takers at that price.
    Eventually I rang the agents and arranged to look through.
    Reasonable nick inside, it’s currently rented at $285.
    After checking the LIM and few other things, I sent the owners an unconditional offer of 196K.
    After a few days of silence, they counter-offered 220K. As I’d found they had bought at 140K several years ago, I figured I was in a strong position, so with a show of reluctance went back at $197,500 and said that this was final.
    They accepted the next day.

    Settlement date is set for 25th January. I’m anticipating a week to ten days to polish it up and have it ready for tenancy by early February, hopefully a period of peak tenant demand.
    We’ll see how it goes.
    Last edited by muppet; 01-01-2012, 11:46 PM. Reason: Make it more readable

  • #2
    Good one FlyerNZL.

    Funny how this landlording business is not as easy as the media make it out to be isn't it?

    Landlords are generally portrayed as lazy people who are filthy rich, have just ended up with a bunch of properties through luck (and/or stealing from the poor) and do no maintenance on their properties. While contributing to the 'unbalanced and unproductive' part of the economy, making the poor poorer, and just generally being horrible.

    And the government even pandered to this sentiment last year when they reduced depreciation, removed LAQCs etc.

    It would be good to see a story like yours above in the Herald.

    And good luck with the new purchase!
    Squadly dinky do!

    Comment


    • #3
      Originally posted by Davo36 View Post
      Good one FlyerNZL.

      Funny how this landlording business is not as easy as the media make it out to be isn't it?

      Landlords are generally portrayed as lazy people who are filthy rich, have just ended up with a bunch of properties through luck (and/or stealing from the poor) and do no maintenance on their properties. While contributing to the 'unbalanced and unproductive' part of the economy, making the poor poorer, and just generally being horrible.

      And the government even pandered to this sentiment last year when they reduced depreciation, removed LAQCs etc.

      It would be good to see a story like yours above in the Herald.

      And good luck with the new purchase!
      read this thread....http://www.propertytalk.com/forum/sh...t-the-bathroom

      Comment


      • #4
        One thing managing my own properties has taught me is never believe everything your tenant says, no matter how genuine they come across.

        I believe there needs to be more bond paid, tenants will be less likely to run if they have a few grand at stake.

        Sometimes you have to treat tenants like toddlers and watch their every move. You have to love being a landlord or you will quit forever!!

        FH

        Comment


        • #5
          Originally posted by freezinhot View Post
          One thing managing my own properties has taught me is never believe everything your tenant says, no matter how genuine they come across.
          Agreed! I have tenants at the moment not paying rent supposedly because the income earner is going through an ACC claim. I'll be asking for documentation today.
          My Profile

          Comment


          • #6
            Drelly, the thing is, most of the tenants I have past and present are not bad people. Life just seems to get in the way, things can start out well in the beginning of a tanancy
            but can all change if circumstances change, Separation, bad financial decisions or just plain laziness can all effect how the tenant behaves. Life has a way of changing people
            for better or worse. To keep on top of them you really have to manage them well and have really good systems in place or you could be in for a long ride if things turn bad.

            I chose to save some money and property manage myself, and I earn every cent!!

            Comment


            • #7
              Very nice story Flyernzl!

              I had one tenant in Mt albert unit wanting to leave 3 months into her fixed tenancy, but her friends (couple expecting baby) wanted to take over, so I kept the rent at $350 incl water.

              Two tenants in the same block in Mt Wellington are leaving in late Feb early March, one bought a house, and one needed to move to 3 beddy for their parents coming over for baby due in June.

              My Mt Eden unit is half way renovated, all new walls up, plumbing lined, gibboards up, and hopefully plastering can begin in the next day or two.

              Our 6th property has gone unconditional, but this will be a trade with my builder friend (since he found it), and we will split the profit 50/50.

              Transfering my home loan to ASB so I can buy more under ANZ later this month.

              Life as a landlord is fun =)

              Comment


              • #8
                AH, well just had one of mine go into premature labour at 28 weeks. Water broken and all that. Nearest neo natal bed ws Wellington so flown there from Tga. Going to be in there 4 weeks at least,not allowed to get up and so on. Sister and in other house on property had to use rent to fly down to welly wood.
                Shit happens to all sorts fo people. Sometimes we have to care.

                Comment


                • #9
                  You're right Viking, the role of LL is not just that of owning a property, it also brings the hassles and risks of other peoples lives into our own.
                  Similar to your little story, I had a tenant whose brother died.
                  She went home to her parents for a few weeks & eventually decided to stay. In the meantime rent was not being paid.
                  What do you do ? Chase it or just put it down to "Business Experience" ?
                  Some things are just not worth the hassle, or just seem morally unacceptable, regardless of the legal situation.

                  i think the lesson to learn is to get things under control ASAP.
                  If it is realistic for them to catch up then get something sorted straight away so everyone knows what will happen.
                  If it is unrealistic that they can catch up, then make sure they acknowledge this ASAP & agree to move out at some suitable time.
                  Unfortunately, even with the best of intentions, or belief that WINZ will help them out, the tenant is likely to have other priorities on their mind & not be realistic about their real financial situation.
                  Last edited by Keithw; 21-01-2012, 10:17 PM.
                  Food.Gems.ILS

                  Comment


                  • #10
                    Wonder if the bank will let you off the mortgage payments since the tenant is having problems?
                    Maybe the council will forgive that months rates payment? Or the insurance company?
                    Perhaps the IRD will let you keep some of your own money to tide you over the difficulties?

                    Surely they care too?
                    The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

                    Comment


                    • #11
                      Nope, but they should.

                      Comment


                      • #12
                        it was banks

                        trying to "care"

                        helping those who spend more they earn

                        to buy houses they couldn't afford

                        that created the biggest destruction of wealth

                        EVER

                        banks have their place

                        and that is offering loans to proven savers

                        no selling financial heroin to debt junkies

                        you can't legislate the poor to wealth

                        you can only educate them in the current skills they need to earn

                        but if you've removed the need to earn to survive

                        you can't be surprised

                        if many can't be bothered

                        welfare is the new "cargo cult"

                        http://en.wikipedia.org/wiki/Cargo_cult


                        it's historically naive believers

                        think if they can whinge enough at the altar of complaint

                        the gov in heaven will continue to distribute their manna

                        1972 and the uk joining the eec is what killed savage's cradle-grave welfare state

                        not roger douglas

                        he only shot the zombie economy

                        that resulted from 15 years of gov trying to borrow our way out of that hole

                        if we could move our beneficiaries

                        onto crafars farms

                        get them producing more than just maladjusted children

                        it would be worth the gov. taxing the workers more to buy the farms

                        but it won't happen

                        as they feel no need to move

                        and no need to work

                        therefore the most productive use of the land

                        is in the hands of foreign owners, avoiding unions and handouts

                        to employ nz'ers not afraid to work the land for more than growing dope

                        rant over
                        Last edited by eri; 22-01-2012, 08:44 PM.
                        have you defeated them?
                        your demons

                        Comment


                        • #13
                          Originally posted by eri View Post
                          it was banks trying to "care"
                          helping those who spend more they earn
                          to buy houses they couldn't afford
                          that created the biggest destruction of wealth
                          EVER
                          WHATEVER

                          . . . then is 'wealth?' Some inflated numbers on
                          a piece of paper? A large loan? Lots of 'toys?'

                          No wealth was destroyed. Just some over-inflated
                          numbers adjusted on said pieces of paper. It
                          was only an enticing mirage drawing many all the
                          more further into the desert.

                          In that way, it's like Labour's self-destruct CGT.
                          There was no gain. Just a change in numbers.
                          They wanted to tax inflated numbers and be paid
                          in real money.

                          May the electorate never throw them a life raft.
                          Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

                          Comment


                          • #14
                            The actions and beliefs of some tenants still retain the ability to astound me. Last year I had a tenant who was frequently on the phone to indulge in low-level grizzling about the lawnmowing at the property she rented from me. After several of these calls I went around to the house to find out exactly what the problem was.

                            It turned out that she firmly believed that mowing the lawn should kill the daisies. When the daisies popped up again each time she blamed the lawnmowing contractor. I don’t think she really believed me when I pointed out that beheading the daisies did not actually kill them and that they would always grow again. We parted ways soon after this meeting.

                            Just before Christmas I called in at my Avondale house and was rather astonished to find a fully functioning wasp’s nest about the size of a saucer established in the porch leading to the front door. The wasps were leading a highly active life in their newly established home and I beat a hasty retreat. Many years ago I was badly stung three times in as many months, on the third occasion needing a hospital visit to alleviate the swelling. As I was not keen to repeat this experience, I got Jan the handywoman to check them out. She reported that they were obviously of a particularly aggressive breed, and as she was about to depart on her world cruise perhaps we could forget about them until the New Year. With luck they might have moved on to a better home by then.

                            As the tenants had never contacted me about this infestation, I readily agreed to this proposition and went away.

                            After four weeks learning a lot about rain and shopping in Havelock North, Alpaca farming in Masterton, and more than you’d ever want to know about hot-air ballooning in Carterton I have returned to find that the wasps are not only still in residence but have increased the size of their nest to dinner-plate proportions. My tenants there are from Malaysia, and when I contacted them about this swarm they seemed rather surprised at my concern. I suppose that when you have lived in a tropical country with a considerable number of predatory native life forms that slither, sting and eat you, a few wasps are of little concern. Resisting my suggestion that I bring in a professional de-bug operator they have assured me that they will remove the colony themselves this week if not sooner. We shall see.

                            Down south at Manurewa, the latest purchase is now in my hands. The settlement did not go smoothly, with the departing tenant leaving a lot of debris and clutter, both inside and outside the house. Terse words with the vendor’s Property Management Company resulted in cleaners and carpet cleaners arriving to polish things up, the cost to be deducted from their tenants bond.

                            The following day we removed the vinyl from the floors in the bathroom, toilet and laundry to let the subfloor dry out – fortunately no structural rot appears on these floors. The glass in a broken window has been replaced, the weeds in the garden sprayed and a lot of sticky transfers scraped off the bedroom doors.

                            I have now toured around the property with Jan and listed the work to be done. The wallpaper in the dining area and lounge has been damaged, so she’ll remove that and we’ll paint the walls and ceilings right through. The ceilings are those 1970s acoustic tiles. Although they still appear sound, some of them seem to have dropped a little so we’ll need to get up into the ceiling cavity and find out how to fasten them back up.

                            There is some work for the electrician repairing the expelair and a couple of cracked light switches, a privet to be cut down outside and one post in the front fence to be straightened up and concreted back in. The rest of the work looks to be cosmetic. I feel the property will polish up well and be attractive.

                            I’ve been budgeting on a rent of $360 a week for this one, but by the look of the house and the current market I think we could now be able to get a bit more than that.

                            Before settlement I called in at my local AMI Insurance office to arrange cover. The young lady who interviewed me was obviously a recent immigrant, and could not seem to grasp that I wanted to insure a house just like the one I already own next door and already have insured with them. She seemed to be fixated on it being a 400 sq.m house on an 80 sq.m section, and insisted that I needed to produce a valuation of the building plus recent photographs before they would even consider insuring it. I smiled politely and walked away. The next day I rang their 0800 number and arranged cover over the phone in five minutes with no hassles. I wonder where insurance companies find some of their people?

                            Comment


                            • #15
                              400 sq.m house on an 80 sq.m section
                              ?? 5 levels?
                              Squadly dinky do!

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