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  • Longer term rental tenancies

    Umm what's the general opinion on granting longer term tenancies - maybe with fixed percentage rent increases?

    see article here

    “Landlords will become more passive, but in exchange they get lower tenant turnover, less costs on fees and maintenance– and a more secure, predictable income. I expect that would appeal to their bank too, which might be able to offer more favourable terms and interest rates if they see a longer term lease in place.”
    cheers,

    Donna
    SEARCH PropertyTalk, About PropertyTalk

    BusinessBlogs - the best business articles are found here

  • #2
    Nothing to stop landlords and tenants negotiating a long term agreement, rights of renewal, or an agreement allowing tenants to make a garden or paint the walls.

    That press release from law firm Stainton Chellew says “A changing residential rental property environment in New Zealand means that the time is ripe for landlords and tenants to consider long term residential leases that are similar to commercial lease arrangements with rights to assign, sublet, and renew.”

    Not much detail on “changing residential rental property environment” though they mention recent law changes, IRD increasing enforcement and Auckland affordability. Recent law changes are mentioned several times, but appear to only be in relation to the bright line test and even that connection is only vaguely drawn. I reckon they are drawing a very long bow to connect those dots with long term tenancies, rights of renewal and other aspects common in commercial leases. I think they have been reading Mr Eaquub’s book.

    BTW, property managers – Stainton Chellew think you will hate long term rentals as some at least rely on churn to make a buck. (Actually they refer to “active tenancies and tenant turnover”, but we know what they mean.)

    Am I a cynic in wondering if this firm sees a business opportunity to set up new commercial-like lease arrangements, rather than much simpler tenancy agreements? Maybe that’s not the case, but I would suggest they might have a chat to a few landlords and tenants before they rush into print on this topic again. Not just in Auckland either. Especially since Barfoot and Thomson have only recently published results of their survey that the average length of tenancies is 2 years and that tenants prefer periodic tenancies.

    Comment


    • #3
      Maybe a study on types of tenant in NZ and what their preference is (long term or periodic tenancy) and what is the percentage of each tenant type of the total rental market. This would be a good study. Which tenant type is a high growth market and are their needs been met.

      cheers,

      Donna
      SEARCH PropertyTalk, About PropertyTalk

      BusinessBlogs - the best business articles are found here

      Comment


      • #4
        their preference

        would be to have something like a 5 year lease with 2 right of renewals for a total 15 years

        but

        be able to get out with 30 days notice

        and let's not even get into what kind of rents they'd like

        however

        anything that makes LL'ing more difficult

        will result in less LL'ing being done

        so is very, very much against the long term interests of future tenants

        while there is a building shortage
        Last edited by eri; 22-12-2015, 03:47 PM.
        have you defeated them?
        your demons

        Comment


        • #5
          I think the strange thing is, if you get good tenants they don;t move anyway. Our average tenancy in Auckland is over 6 years now. In Rotorua, where they don't exist, it's only a year, maybe even slightly less actually.

          Comment


          • #6
            What a sad state of affairs this country is becoming a nation of tenants. Hope the petty capitalists here don't mind paying more in tax.

            Comment


            • #7
              excessive consumption

              has lured those with poor self-control

              back 100 years to life lived as tenants

              only then they starved and died of disease

              now they eat, drink and drug themselves to an early grave

              very sad!
              Last edited by eri; 22-12-2015, 07:34 PM.
              have you defeated them?
              your demons

              Comment


              • #8
                Originally posted by eri View Post
                excessive consumption

                has lured those with poor self-control

                back 100 years to life lived as tenants

                only then they starved and died of disease

                now they eat, drink and drug themselves to an early grave

                very sad!
                Your resort to stereo types is sad.

                I live life in the positive side of the financial ledger. I still can't afford to buy in Auckland.

                Comment


                • #9
                  even in only 2 lines

                  you mention yourself twice

                  but it's not about you mick
                  have you defeated them?
                  your demons

                  Comment


                  • #10
                    Personally I think that creating this option would be a good move.

                    Instead of a Landlord just offering either a periodic tenancy or a fixed term tenancy, this type of tenancy agreement could be an available third option.


                    Of course, in return for effectively issuing a 'commercial' lease, the Landlord would need the usual other features of such leases to be incorporated within the agreement.


                    These would include (but not be limited to):

                    - the tenant being directly responsible for payment of the rates, insurance premium, daily water charges and any other overheads applicable to the property in addition to their rent payments.

                    - the tenant supplying some or all of the curtains, floorcoverings, light fittings, cooking appliances, bathroom fixtures and cabinetry (which they then remove at the end of the tenancy).

                    - the tenant being solely responsible for the maintenance and/or replacement of these items.

                    - the tenant being responsible for all ground maintenance at the property.

                    - if the tenant wishes to leave prior to the end of the tenancy term, not only are they responsible for finding a replacement tenant (who needs to be then approved by the Landlord) but they also remain liable for payment of the rent should that replacement tenant fail to pay the rent.

                    - on termination of the tenancy term, the tenant is directly responsible for handing back the property in the same condition in which they moved in. This would generally require a complete repainting of the interior at the tenant's cost.


                    I understand that all of the above are standard features in the much-praised European residential tenancy arrangements, but are usually glossed over by those who support the introduction of a similar system here.
                    Last edited by flyernzl; 22-12-2015, 10:34 PM.

                    Comment


                    • #11
                      any engineer will tell you

                      equal outcomes are impossible

                      without equal inputs

                      except social engineers

                      they believe that even if something has always failed

                      if you wish enough

                      it might work this time
                      have you defeated them?
                      your demons

                      Comment


                      • #12
                        Originally posted by eri View Post
                        even in only 2 lines

                        you mention yourself twice

                        but it's not about you mick
                        Spot on Eri

                        Michael What is your problem? If you are not willing to make a positive contribution then I suggest you go somewhere else.

                        Pretty sick of you going on a tangent - effectively ruining a good conversation

                        Comment


                        • #13
                          Following...
                          Free online Property Investment Course from iFindProperty, a residential investment property agency.

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                          • #14
                            Originally posted by Bluecoat View Post
                            Spot on Eri. Michael What is your problem? If you are not willing to make a positive contribution then I suggest you go somewhere else. Pretty sick of you going on a tangent - effectively ruining a good conversation
                            I don't have a problem with posts from a different POV. After all there is an Ignore list.

                            Comment


                            • #15
                              Originally posted by flyernzl View Post
                              [FONT=verdana].....
                              I understand that all of the above are standard features in the much-praised European residential tenancy arrangements, but are usually glossed over by those who support the introduction of a similar system here.
                              I wonder why Stainton Chellew didn't think to mention most of those? Did Mr Eaquub cover them in his book?

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