When you enter into property investment in New Zealand, it's an exciting step. You are making a great move towards financial independence by creating rental income, and hopefully seeing gains in the value of your real estate. Often, one property is not the end of it, but some people do just want a single investment property.
Once you purchase a house, the next step is often something that takes people by surprise – becoming a landlord. The thrill of getting on the property ladder fades and now you have the day-to-day of managing tenants! While many people engage a property manager to take this weight off their hands, some choose to go it alone. If this ends up being the case for you, here are some tips on how to choose the right tenant.
Get a pre-tenancy form
When people are interested in renting out your property, get them to sign a pre-tenancy form. This generally includes names and identification, as well as details on their tenancy history. References are also useful, so you can talk to other landlords to find out how these people were as tenants.
You can also do a credit check, which is useful to ensure your prospective renters have a history of paying the bills on time.
Learn to say no
We are often a country of 'yes people', and can enter agreements because it seems polite to do so. However, this is your property we are talking about here – make sure it is treated well! The Ministry of Business, Innovation and Employment notes that when you say no to a tenant, you do not have to state why.
Practice saying 'no' – it is something you should do until you find the right people for your home. However, beware of becoming too much of a perfectionist, lest you end up with no tenants and no rental income.
For more property investment advice, remember to contact the team at Goodlife.
Here's to your financial independence!
Daniel Carney
Authorised Financial Adviser / Investment Property Expert