Since iRentProperty is closely tied to iFindProperty, a specialist investment property agency, we promote ourselves as a business that can help investors unlock value in, and upgrade, their properties, when other property manageers might say “too hard”.
Today I have stories to share about two new clients who took us up on that!
First up was Jim, who contacted me with a message that could be summarized as “I’ve just bought a property… help!”
Carrie and I popped around to meet Jim and learn his story. He had just bought a two-flat property from a relative, who years ago had inherited the properties and entrusted the management to a family friend. The friend was an old-school chap who did everything on a handshake, so the first thing we learned was there were no tenancy records, no bonds lodged and no history of inspections.
The houses, which sit one behind the other on a large section, were both solid, albeit dated, and we assumed had not been updated to comply with healthy homes, let alone to keep up with regular maintenance. There wasn’t any separation for privacy between the two homes and the one garage on the site seemed to be filled with a lot of personal belongings. It wasn’t clear who was to look after the gardens, which were overgrown.
So Jim had some stuff to work through…
The big concerns
Once we had viewed the property, we explained to Jim how he was the one carrying a lot of risk, and under the new tax laws removing interest deductibility, the lack of cashflow would be painful. He would need to commit to sorting out the above issues ASAP, however we would coordinate everything for him.
It wasn't all bad news. Because Jim bought the properties at a good price, he would be well ahead on his investment after taking the required actions.
We agreed to onboard Jim as a client in stages:
Stage 1: iRentProperty was to organize building, meth and healthy homes reports and seek advice on Jim’s behalf on how to best handle the existing (not legal) tenancies.
Stage 2: Organize a works schedule and budget to get the homes compliant. Some of the work was invasive and disruptive so maintaining a relationship with the tenants was important so that easy access was available to tradespeople.
Stage 3: Keep an eye on the repairs and obtain a healthy homes certificate once done.
Stage 4: Depending on how things shook down with the pre-existing tenants, possibly advertise for and place new tenants at current market rent
Stage 5: Manage the property for Jim, who can now focus on his own business.
On a side note, I plan to help Jim work out a long term property strategy to build passive income and wealth in Rotorua. He has a passion for the area and long-term wishes to upgrade his home and move to area where his family was originally from. Subsequent to getting the properties to a legally rentable standard, there is further opportunity for Jim to add the equity and cashflow that will enable him to invest further. Jim is committed to this journey and we applaud him for recognizing where he needed some help to get there.
We were called by an investor who bought a rental on a large section through iFindProperty’s buyers agency service a couple of years ago - pre-dating iRentProperty.
The reason they bought was to eventually add a second dwelling to the site, a decision sped up by the government’s recent decision to exempt newly built properties from their interest tax deduction law change.
The owner lives in Auckland, so she needed her local team to back the project, but when she called her existing property manager about how to handle the tenancies, the message was “too hard, no thanks”.
Credit to the investor for not taking no for an answer, and when she called Maree asking for a referral, we introduced her to Carrie, who has managed through three such projects, including one on her own rental property!
Communication is the key to keeping people happy through such situations, and also a bit of pragmatism on the owner’s part because a tenant is well within their rights to reject anything that with impact their “quiet enjoyment” of a property.
At the same time, there is a large period during the planning for a build where the site does not get touched… so someone experienced with feet on the ground was needed and Carrie fit the bill.
The investor is now on a clear path through their new build project and with Carrie’s advice on how to find the balance between cost vs tenancy benefit they should come out the other end with properties that rent very well, without any battles with existing tenants.
In summary, we do this because… this is what we do. We are all investors. Carrie has invested in Rotorua for many years, while Nick and Maree have both been very active investors for over a decade, while helping their buyers do similar projects through iFindProperty.
Owners can have a profitable asset and improve the quality and quantity of local housing, which is a win for families who in turn rent those properties. You just need to be willing to roll up your sleeves and make something happen.
If either of these stories resonate with your own situation please get in touch. We'd love to hear from you.
[Names have been edited for privacy]