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  1. #1
    Join Date
    Mar 2007
    Location
    Auckland
    Posts
    2,983

    Default 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 at 11:46 PM. Reason: Make it more readable

  2. #2
    Join Date
    Sep 2007
    Location
    Auckland
    Posts
    8,268

    Default

    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!

  3. #3
    Join Date
    Sep 2011
    Location
    Dunedin
    Posts
    1,660

    Default

    Quote 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....https://www.propertytalk.com/forum/sh...t-the-bathroom

  4. #4
    Join Date
    Oct 2006
    Location
    Auckland
    Posts
    570

    Default

    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

  5. #5
    Join Date
    Jan 2004
    Location
    Whangarei
    Posts
    5,867

    Default

    Quote 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.

  6. #6
    Join Date
    Oct 2006
    Location
    Auckland
    Posts
    570

    Default

    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!!

  7. #7
    Join Date
    Jul 2010
    Location
    Auckland City, why invest else where?
    Posts
    984

    Default

    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 =)

  8. #8
    Join Date
    Sep 2008
    Location
    Tauranga
    Posts
    1,518

    Default

    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.

  9. #9
    Join Date
    Oct 2008
    Location
    Auckland/Melbourne/ whereever the money is
    Posts
    1,380

    Default

    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 at 10:17 PM.

  10. #10
    Join Date
    Apr 2004
    Location
    Auckland
    Posts
    1,895

    Default

    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.


 

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