Is Your Rent Too Low?
Approximately 72% of New Zealand’s rental properties are being self-managed by the owners. Only 28% of rental properties are professionally managed using a Home Rental Management Company. This is largely due to the fact that Property Management as a profession is still evolving, and that New Zealanders generally have a ‘hands on, do it yourself’ mentality.
It is interesting to note that privately managed properties often take much lower bonds, do not use formal application forms and are rarely subject to credit checks. In large, privately managed properties are let on the face value of the tenants. Another major difference between professionally managed and privately managed properties is the rent yield achieved.
A privately managed property is typically not marketed as thoroughly as a professionally managed property using a Home Rental Management Company, which means that the pool of tenants to choose from is much smaller and the rent achieved typically lower. The experience of the owner manager who will most likely only go through the process annually compared to a professional Property Manager who potentially signs up new tenants daily is going to be obvious. The professional Property Manager will know the current market rates, have access to tenant check data bases and be up to date with all current legislation.
As a result, the majority of privately let properties return well below market rents. Additionally, a professionally managed property using a Home Rental Management Company will typically have a regular rent review and increase. This is not generally the case with privately managed properties as most owners simply don’t feel comfortable increasing rent with their tenant but the Property Manager knows it is simply a part of their role.