Our focus this month is on the ongoing maintenance of rental properties. It’s important for landlords to understand there are always ongoing costs associated with owning a physical asset – houses don’t maintain themselves. 

Many property investors don’t like unit title properties because of annual body corporate fees, but those fees actually include an allowance for major works in future, such as a repaint or roof replacement. The maintenance portion of the fee is simply the estimated cost of future maintenance, smoothed over time. These future costs are ‘invisible’ when you buy a freehold or crosslease property, but it doesn’t mean they won’t arise. 

We manage rental properties for clients for many years in some cases, and our goal is always to return the property in at least as good a condition as when we started. This involves more than just ensuring tenants are taking good care and things are fixed if they break. A proactive approach recognises that some parts of a home deteriorate faster than others, and will need to be replaced or upgraded over time. We often work with owners to plan future kitchen and bathroom upgrades, because this investment has huge benefit whether you plan to sell or rent long term. There is simply much higher demand for homes in modern condition. 

For many owners, high mortgage interest rates mean this is not the best time to consider major works, and even minor maintenance costs can be difficult. It’s crucial to build these into your annual budget, because problems that are ignored don’t go away. And gradual damage (caused by an ongoing water leak for example) will not be covered by your insurance. 

If you manage your property yourself and employ contractors, remember health and safety legislation means as a 'Person conducting a business or undertaking' you have responsibility to ensure their work is conducted safely. If your tradesperson falls off a ladder while wearing jandals, you may be personally liable. To manage your risk, you should undertake a pre-qualification of all contractors. Ensure they provide you with proof of competencies before commencing work, and also provide a safety/risk management plan and have public liability insurance. Make sure you retain a record of these after reviewing.

Louise Benson, Head of Property Management
Barfoot & Thompson Milford
027 431 9536
milford.rental@barfoot.co.nz