Should I avoid becoming a landlord ?

[Ruari]

Property management fees

Property management fees range from 7% all the way up to 12% +gst i have found while working in the industry. I have found if you go with the lower ones, which is what most people like to I have found that you often get bad information (on RTA Acts and other legislation) and would be better running your property yourself. Companies with higher fees hold themselves more accountable and you are often dealing with a property manager who has got properties of their own.

[Bob Kane]

Should I avoid becoming a landlord ?

No.
Should I manage the property?
No.

[mrsaneperson]

No.
Should I manage the property?
No.

I would manage the property yourself , have a look at a basic tenancy agreement from say Barfoot & Thompson , see how they cover the various pitfalls , much better than the basic one that is available from the governments Tenancy site.

Your best insurance to "win" at this game is in your selection of a good quality tenant. Check not only their current landlord reference /contact but more importantly the one prior as you often get a more unbiased truer account of what kind of tenants they really were.

Learn some simple handyman skills if you don't have them already as this can save you hundreds rather than having to look for trades people all the time.Many are not really competent and leave jobs improperly finished .

Get to understand basic tenancy law most essentially, notification periods of rent increases and 14 day advisory notices for rent arrears etc.

Treat the tenant well, have in mind it is your house but their home . Avoid - unless as a last resort - filing for Tenancy Tribunal hearing. It is time consuming and stressful, no matter what the outcome is.

Property management fees are around 6 to 8% plus gst , That works out as a hefty sum over 1 year - close to 3k on a rent of $600 pw

[ermat]

Thank you mrsaneoerson

[OnTheMove]

the main problem with being a LL is having tenants

And other elitist LL's you just nod up and down to and club meetings :-) hehe

I personally prefer the ASX to the NZ property market now, but there are still good buys to be had, you can lower your gross yield risk by buying property for as low as possible, some would call this Evaluated Market Value haha, if you can get 10-20% below this, you have lowered your risk to both housing corrections and your yield lowering. And of course you are buying for the income so yield should be your main objective (although nothing wrong with a mixture of yield and CG).

It all comes down to, can you afford it, does it make financial sense (ie it gives you an income better than easier options), is it a good buy, is it not in an overcooked pocket etc. You can only know that by looking around and bouncing it off experienced investors.

As far as the personal side of it as a lifestyle choice, being a LL is ok, the more hands off while retaining a good income the more enjoyable it is.

Good luck to you :-)

[donna]

Some people love managing their own IPs while other LLs prefer let someone else do the job. I'm the latter, and I know it's not a job I'd want to do so I'm fine with paying for the service.

Using a PM doesn't let you off the hook you still need to know the basics of the Tenancy agreement etc but it does allow you to spend your time elsewhere.

cheers,

Donna