Room by room rentals Q & A

[Glen]

I thought i'd start a thread dedicated to room by room Q & A.

I myself have 2 RBR(going on 3), amongst my other standard rentals, but still have many questions regarding the best possible ways to maximise income from these RBR investment properties.

Maybe others here on PT who themselves run RBR can suggest ideas to streamline the process?

Internet?
Furniture?
Furnishings?
SKY TV?
Security?

......etc?

[bucknz]

Hi Glen,

We have two RBR. One we manage ourselves which is time consuming. We provide Telephone & Internet, cap on power at $200pm and we also pay gas for the hot water. All furniture/whiteware/utensils are supplied. As for security we leave that up to the tenants but issue each with their own numbered key which is returned on leaving. We also mow the lawns.

Currently have one tenant who collects rent from others so we only have one collection point. He is now wanting a reduction in his rent for doing this.

Replacement tenants are usually sourced by the tenants themselves as I find this works to a better household than me putting "strangers" in.

As you are aware we have quite a transient vineyard worker population in Marlborough which is good for RBR tenants.

Hope that helps! !

Dave

[revdev]

Currently have one tenant who collects rent from others so we only have one collection point. He is now wanting a reduction in his rent for doing this.

That seems like a reasonable request. How much is he/she talking about?

Cheers,
G

[Glen]

Cheers Dave.

Are you running this as a sideline to your vineyard or other business though?

[spurner]

Sounds like you have it running pretty well.

But what happens if/when they use more power than you allow for - it gets cut off?

How many tenants would live there if there was no electricity?

Just a thought.

We have two RBR. One we manage ourselves which is time consuming. We provide Telephone & Internet, cap on power at $200pm and we also pay gas for the hot water.

[Scott Miller]

Hi Glen,

I have a RBR out by the Uni/TColl. At first I went down the student route but found the vacancy period over the Christmas period to taxing.

I know have a good PM and offer the following.

Fully furnished - including bed cloths etc.
Sky - Basic package
X Box - 3 games
Broadband - cable (in every room) and wireless (cable not used so much now)

What I have found is when a RBR is running well it's great, when they are not running well they are horrible.

[Glen]

I guess the area in which the property is located makes a huge difference too, with regards to the type of tenant.

[Scott Miller]

Yes - I now have a good mixture of people. In fact I cannot remember the last time I had a student in the house.

[Stevegoodey]

Hi Guys,

I have 7 rent by room properties and a couple of boarding house's.

I don't find occupancy too much of an issue mine are all in Wellington.
I'm getting $145 for a large closet/room and my best room returns $320 per week.
Most of my tenants pay around $220 per week including expenses.

Good thread.

Steve

[bucknz]

Sounds like you have it running pretty well.

But what happens if/when they use more power than you allow for - it gets cut off?

How many tenants would live there if there was no electricity?

I have a $200 cap on power and anything over this is paid for by the tenants.

Are you running this as a sideline to your vineyard or other business though?

Glen, I dont have a vineyard, the two RBR's are run amongst the compaines I have set up for my property portfolio. My true business is New Zealand Home Loans which I have just started in New Plymouth.

Scott I agree, when the RBRs are running well they are fantastic cash cows, but when tenants are low it dosent take long for that profit to be sucked back out again. Of course you still have power/rates/insurance and mtge payments to make.

Cheers

[Bluekiwi]

I looked very hard at it and did a lot of investigation, and my new property could probably make a great RBR if I put another toilet in.

But there is no one in Auckland who will manage room by room's, no property manager I mean.

What are people getting per room - would need to be $150 plus wouldnt it, with the services provided.

I missed the Sue Laurie RM event.

[Scott Miller]

The typical formula for power is $12.50 per person per week. If you have 2 power top up cards (like I do) then the tenants can fight amoungst themselves on who pays for the extra top up.

[Stevegoodey]

I work on $15 per room per week and that covers power/internet and sky TV.

Steve

[Glen]

RBR TA Agreements.

When signing tenants up to a RBR/boarding house agreement, what would be the CORRECT form of agreement? ( I've stated below how I currently do it, but am open to sensible suggestions to improve ).

How do others run their agreements, and what other methods do you use?

I normally just use a residential tenancy agreement as you would with any other tenancy, but make ammendments to the TA form in regards to the lenght/term and type of residence ( i.e. remove anything about being a periodic or fixed term ), and instead include a clause that one weeks notice by either party to vacate is agreed on.

I had been taking $200-$300 as bond for the rooms, but have now changed this to one weeks bond (not lodged) and one week in advance ( $170-$200pw per room). One weeks notice by either party to vacate.

Cheers!

[essence]

I had been taking $200-$300 as bond for the rooms, but have now changed this to one weeks bond (not lodged) and one week in advance ($170-$200pw per room). One weeks notice by either party to vacate.

RTA Section 19 -

Duties of landlord on receipt of bond
(1) Where any person pays to the landlord, or to any other person on behalf of the landlord, any amount by way of bond, .....
(2) Failure to issue a receipt, or to forward any amount received, in accordance with this section is hereby declared to be an unlawful act.

109 Unlawful acts
(1) A landlord or a tenant, or the chief executive acting on behalf of a landlord or a tenant, or the chief executive acting as the person responsible for the general administration of this Act, may apply to the Tribunal for an order requiring any other person to pay to the applicant an amount in the nature of exemplary damages on the ground that that other person has
committed an unlawful act.

(4) The maximum amount that a person may be ordered to pay
under this section shall be as follows:
(c) in the case of any unlawful act to which section 17(3) or section 18(4) or section 19(2) or section 23(4) or section 46(3) or section 48(4) or section 137(2) refers, $750:

Any money taken as Bond MUST be lodged with DBH Bond Centre. Should your tenants or ex-tenants discover that you haven't done this, or wish to be spiteful and want to "dob you in" you could potentially be fined $750 for each infraction of not lodging the Bond.!!