Healthy homes standards take effect this week: how can your rental stand out during the traditional quiet season?

As 2020 draws to a close, December is usually a quiet month for the rental market. The long holiday period that follows prompts many tenants, such as graduating students or employees returning home after work away, to end their tenancies and leave. People seeking rentals also tend to spend this time on holiday or gathering with friends and family, rather than thinking about moving. The rental market will not enter its busy season until mid-January, when people return to work and study. So, if your tenants plan to leave or you are preparing to list your property for rent, what can you do over this brief period of just over a month to add value?

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The rental market has its ups and downs, but whatever the wider conditions, some properties always stand out, attracting applications from several prospective tenants and quickly letting at a satisfactory price.

For example, a four-bedroom standalone house in Mairangi Bay, in good condition and reasonably priced, recently attracted 35 applications in its first week on the market. After the property management company shortlisted 3 strong applicants, the landlord quickly chose a preferred tenant.

For reasons we all know, apartment vacancy rates in central Auckland have risen and properties are taking longer to let. I recall an apartment on Beach Road that had sat vacant for four or five weeks without finding a tenant. After it was transferred to our company and advertised again, it was successfully let on its fourth day on the market.

These examples show that excellent condition, a reasonable price and effective promotion are key to a property’s success in the rental market.

Improve the property’s condition

For tenants, housing is a consumer product, and everyone wants the best value within their budget. Within a given rent range, tenants weigh up a property’s condition, location and nearby transport facilities. For landlords wanting to let their product—the rental property—more successfully and quickly, condition is the only one of these factors they can change. Landlords could therefore consider renovating during a vacancy, particularly to bring the property up to the healthy homes standards. Points to consider include:

• For timber windows in older houses, consider replacing the handles and sealing strips to improve the seal.
• Install a heat pump in the living room and ventilation systems in the kitchen and bathroom to meet healthy homes requirements.
• Consider repainting or replacing the carpet to give the house a fresh look and win tenants over at first sight.
• If you do not plan to renovate the kitchen and bathroom, consider replacing frequently used items in older houses, such as the stove, taps and toilet seat. These targeted upgrades can reduce the likelihood of unexpected damage during tenants’ normal use.
• If space permits, try adding on-site parking, storage or living space, perhaps by installing a metal shed or building a deck or covered outdoor area. This can give the property extra features and more highlights for tenants at viewings.

Presentation and promotion

Once renovations are complete and the property is ready to list, its presentation and advertising channels become particularly important.

First, make sure the rental is tidy inside and out before listing it. The interior must be clean and free of clutter, and plants, shrubs and trees in the garden should be trimmed.

Second, photographs should be clear and attractive. Include every indoor and outdoor space, and record a video if possible. Providing comprehensive information helps tenants make choices when searching and filtering properties online.

Third, use more than one advertising channel. Although Trade Me is the most widely used and popular rental platform, consider also advertising on other online and community platforms.

Set the asking rent carefully

How easily a property lets also depends on how the asking rent is set. Online rental listings are grouped by rent range, and tenants generally filter properties by the advertised price rather than negotiate. Instead of setting an inflated, overly optimistic rent and waiting for tenants to bargain, advertise a price that reflects market demand and meets your minimum expectations. Otherwise, many prospective tenants may simply skip the property because its asking rent falls outside their budget.

Healthy homes

As mentioned earlier, meeting the healthy homes standards is an important consideration when renovating between tenancies. The new Healthy Homes Standards formally took effect on 1 December. Landlords must provide a healthy homes statement with any new, varied or renewed tenancy agreement, describing the property’s current compliance with the standards. Landlords can complete this themselves or engage an independent company to prepare a full inspection report and statement. If no statement is provided, or if information is incorrect or other related breaches occur, the Tenancy Tribunal can impose a penalty of up to NZ$4,000. After 1 July 2021, properties covered by any new, varied or renewed tenancy agreement must meet the healthy homes standards within 90 days of signing. Before welcoming new tenants, landlords should therefore arrange for a professional to prepare the statement, or prepare it themselves, as early as possible, identify any gaps and complete the necessary work.

Overall, although the COVID-19 pandemic has dealt a blow to New Zealand’s economy, housing remains a necessity. While borders are closed, some people may be unable to afford their current rental after losing work or suffering business setbacks. Others with stable or unaffected incomes, unable to move overseas or spend money abroad, may choose to improve their quality of life by moving to a different rental. Once borders reopen, some current tenants may leave the country, but more migrants, workers, international students and returning New Zealanders will also arrive. The residential rental market can be expected to avoid a major blow. In the short term, landlords simply need to make their rentals more competitive.

About the author:

Franklyn Young

A University of Auckland graduate with a bachelor’s degree in property, the author subsequently worked for several large property companies managing residential properties, commercial properties and bodies corporate. The author is currently a business development and project manager at Crockers Property Group.