The good trend continues since writing the previous newsletter last year. The traditional summer tenancy peak is providing firm demand in Nelson. Looking back to past rental demand statistics sourced from TradeMe and census figures shows that for the whole country the number of vacancies has dropped by a surprising 1000 over the last 6 weeks and 2400 since December. Nelson and Tasman has increased slightly but what I and other property managers are seeing is tenants migrating here from the likes of Canterbury and Auckland are expecting to have to make a decision quickly and pay more than in the past. Clearly the shortage in Canterbury is over but the hype lingers on. I have commenced collecting and saving the number of properties for sale. This produces some interesting facts. I really am not sure what to make of them. You readers are invited to contribute to the common pool of knowledge by having a guess and emailing me your thoughts. In Nelson there is 7.8 times the number of properties for sale compared with properties to let. In Tasman 11.61x and Auckland a low stunning figure of just 2.34 and Wellington 2.11. So does mean that Auckland and Wellington has abandoned TradeMe to advertise properties for sale or is it what the agents are saying. There is nothing much for sale. How does a high or low number of properties for sale impact on the rental market. Well obviously a shortage of any kind of stock be it wheat or houses makes prices go up. Eventually higher house prices will force the rent prices up because there are more people trapped in the rental market and for a while rent will be cheaper than paying a mortgage. So does this mean the opposite in our area where despite thin weekly real estate papers there seems to be more to choose from. Well actually in Auckland 2.13% of all residential properties are for sale compared with 2.64% in Nelson so despite the total size differences there is not much difference in percentages of “for sale” listings. I think perhaps the rental market is having an impact on sales in Nelson and in Auckland the reverse is occurring in that the for-sale market is impacting on the rental market. Who knows? If one wants to think about statistics and feel sure about something just look at Marlborough. Over the hill 7% of all dwellings are for sale.
WARNING THE DESPERATE ARE GETTING CUNNING
I recently had a distressed call from a young landlord. He said how come you managers have not released the bond for my new tenant who used to rent off you? He could not hide his anger and distress. Your Kate who works for Glenn told me my prospective tenant was great when I rang her on her mobile. My staff responded with a “Who we do not have a Kate working here. Yes she does he spluttered this is her mobile phone number. The answer was “Sorry never hear of her. That tenant had her tenancy terminated and had already been in the tenancy tribunal for rent arrears.” I did some tracking down to get back to the investor. I had his email because he has attended our meetings at least once but has not become a member. We have since had a most pleasant phone conversation and he has now handed over his property to a property manager who he had known for some time. He says he rang the call centre for advice and they said there is nothing in the RTA to prevent people acting this way and the only way to get rid of the tenant is to give her a 90 day notice to terminate, which he has done. Well firstly RTA section 78 (1) (g) specifies that the Tribunal may terminate a tenancy where the agreement has been induced by fraud.
Secondly what should he or another other landlord have done to avoid getting into such a fix? Always check the phone number of the reference by looking at their web site, white pages listing or ask some searching questions of the referee. Always be wary of mobile phone only numbers. Look up the ownership of the property on Terranet or various other sites. At the very least do a search of http://www.tenancytribunal.govt.nz/tenancy_tribunal/search.do. If he had done that he would have seen his lovely new tenant owed me rent. Obviously he should have also done a credit check.
Glenn Morris is the owner of Nelson property management company, “Glenn’s Vacancies”, managing residential and commercial investments. He is the current secretary of the Nelson Property Investors Association. He was active in the review of the RTA and is a well-known figure in the property investment community. He has a reputation for effectively managing difficult tenancies.”
