Weekly rental prices across Wellington were up 9.8 per cent in March 2017, compared to the same time last year, double the national increase of 4.7 percent. Locally in Kapiti people are telling us the rental market is still competitive, with demand for homes exceeding supply.
The Trade Me Rental Index also found that the median price for a rental in the Wellington region was $450 a week, and demand for all types of houses is up, with a three to four bedroom house bringing in an average of $525 a week.
If you have been considering an additional property, it’s still a really good time to invest.
Tighter LVR (Loan to Value Ratio) restrictions bought in by the Reserve Bank has made it slightly more difficult for some investors, particularly for those who want to add to their portfolios. However, if you are new to the rental market we can work with you to secure a property.
While some banks are charging slightly higher interest rates for investors, this isn’t always the case. Banks will consider a range of factors in pricing interest rates, including whether or not the family home is being used to help finance new borrowing, so it really does depend on your individual situation - working with a mortgage adviser will help you secure the best rate you can and help be strategic with loan structures and tax effectiveness.
Beyond the mortgage, there are also other important factors to consider. We often give our clients the following advice when taking on a rental property:
- Treat your tenants like your customers,
- Make your property warm, dry and comfortable for your tenants,
- Be fair but firm when managing the property,
- If in doubt, hire a property manager, and
- Stick to the usual rules around choosing a desirable location and amenities for would be tenants e.g. fenced section, close to schools and public transport etc.
Putting it simply, by looking after your tenants, they are more likely to look after your investment.
We encourage landlords to invest in their property - make sure it’s maintained, insulated and most importantly warm & dry. Happy tenants mean happy landlords and ultimately better returns for you.
If you are considering the rental market and haven’t yet made the leap, talk to us - we can help you make your investment goals a reality.