Are you being scammed?

The internet, so convenient. Particularly for those who wish to do harm.

Early this year we were showing a lovely home in Kilbirnie and some prospective tenants turned up whom we were not expecting. ‘This is the place for $260 per week right?’ they asked, pleased at how nice it was. ‘No, it is $480 per week’ we replied, ‘are you at the right house?’. They confirmed the address, and sure enough, they were at the right place. They showed us the advert they had printed out from Craigslist. It was the same property indeed, but not our advert, though the details and photos had been copied from our TradeMe listing.

The prospective tenants had been emailing the ‘agent’ who was going to send them a tenancy agreement via email once they paid the rent and bond by internet banking. It was just luck they happened to bump into us at the property when they did a drive-by and discovered the person they were dealing with was scamming them.

The long and the short of it: If the deal is too good to be true, it probably is. If you can’t meet the person at the property, they probably have no right to be renting it. And if they want money up front before you can look inside, be very wary. If they don’t have a key, they have no right to be there. Check their credentials. Only deal with reputable companies with professional affiliations, like the Independent Property Managers’ Association. Rental Results is a proud member of the IPMA and Wellington Property Investors’ Association. The scammer is not.

What to do BEFORE you sell your rental property.

1. Talk to your property manager. You will need to know details of tenancy agreements including the expiry of any fixed term agreements, and what your rights and responsibilities are, including accessing the property for showing it to potential purchasers. Your tenants have a right by law to know the property is on the market, and the property manager is the correct person to tell them. Your tenants may want to purchase the property, which could save you sales commission and make it an easy process. Or other clients of your property manager may be looking to buy your property - ask. Your property manager can also recommend some sales people who may be able to sell your property with the least amount of disruption to your tenants. You want to keep your tenants on board throughout the process because if it doesn’t sell, you will need to live with the consequences. A tenant can make or break a sale with how they keep the property during the process. A good property manager will spell out to them that they are being evaluated along with the property – a new landlord won’t want to keep messy and difficult tenants.

2. Talk to your bank. Your lender may have some strong opinions about you selling a property. Make sure you can close the deal without losing your own house too. This is particularly important if you have a high mortgage on this or any other property.

3. Talk to your accountant. There can be some advantages to carefully timing your sale to fall into one or another tax year. Better to ask early than regret later. They may also have some strategies for avoiding the need to sell at all, or for dealing with GST, depreciation clawback, or capital gain issues.

4. Get the paperwork together, such as tenancy agreements, rental assessments, comparative market analysis, valuations, building report, LIM report, etc for the buyers to view. Having these documents on hand will make your salespersons job easier, the buyers happier, and your sale more likely to go swiftly and easily.

5. Choose the right salesperson. It is not necessarily the one who sold you the property. Some salespeople are better at selling family homes, others better at investment properties. Make sure they know your area well, have a large database of contacts, and good marketing strategies. Don’t just go for the one who names the highest price – they may just be angling for your listing. Have them back it up with comparable sales data for your area.

6. Be clear about how long the property will be on the market, and have a plan B if you don’t get an offer you are happy with. Remember, the market will decide what price you get, you decide what you do with that.

7. Decide which improvements you will do to assist the sales process, and which you will defer. Anything which improves the presentation of the property is usually a winner with buyers. Don’t put off maintenance – less and less people want a ‘doer-upper’ and a negative building report could cost you a sale.

8. Invest in great photos. A picture paints a thousand words. Have yours say ‘desirable’. Make sure you own the rights to the photos – if you don’t sell, you can use them for advertising when it is for rent.

9. Keep good tenants in the property during the process. If you are not worried about paying the mortgage you can wait for the best possible offer. Good tenants make a property look homely with nice furniture, and many tell prospective purchasers what they love about the property. Bad tenants are a whole other matter…

10. Keep your property manager in the loop. They can help in so many ways, so treat them as partners in the process. They can be very helpful for testifying to the rent-ability of the property, rental assessments, and apportioning the rent on settlement and a well-managed property is easier to sell than a badly-run one.

Be Prepared - Just Incase

I thinks its fair to say the events in Christchurch have got us all realising that we could prepare ourselves a little bit better. The fact that hardware stores sold out of emergency supplies in the weeks following is a good sign that people are stocking up on essentials to get them through.

Things to think about:
If it is a major disaster then everyone will be affected this includes tradesmen and all the people in the emergency services as well as your property managers and potentially property owners. They may have family member missing, may be trapped themselves and may not be contactable. So patience is extremely important. Its a well known fact that people who get out there and help during extreme situations have a greater survival rate that those that sit back and wait for others to help them. So get out there and do what ever you can to help. Check on neighbours, friends and if you have power etc share it around.

Get a survival kit organised:
Find a location that will be easily accessible if your home is not stable. A lockable garden shed is ideal. Get a large waterproof airtight container a fill it with everything each member of your family will need to survive at least 3 days. This could include the following:
Water (3 litres per person per day)
Food (non perishable)
Torch and battery powered radio (with spare batteries)
Toilet paper, plastic bags and a bucket.
Other toiletries you may need.
First aid kit and any medication you may need.
Pots and pans for cooking (and any other utensils - don't forget a can opener)
Face and dust masks.
Towels and blankets
Sturdy shoes
Warm clothes
Pack of cards or travel games

Make a plan:
Maybe you share a flat with other people your age or maybe with family. Who ever it is you need to come up with a way of checking on each other and a location you will meet at. The internet and cell phones are a great way to let people know that you are safe - refer to the rental results action plan blog to find out how you can notify us that you are safe.

Always be prepared you just never know when something may happen.

Away for 21 days? – 1st April deadline to organise an agent

The Residential Tenancies Act 1986 was amended on 1 October 2010. One of the amendments was to ensure tenanted properties were being looked after when the owners were overseas for more than 21 days. From 1st April, all owners who are out of New Zealand for more than 21 days must appoint an agent to liaise with tenants and get essential maintenance done. Failure to do so will be deemed an unlawful act and can incur a penalty of up to $1000 (See Section 16A(6) of the Residential Tenancies Act Amendments).

An agent can be anyone who is an adult and able to make decisions on your behalf, whether that is Aunt Patty, your brother Bart, or your friend Nelson, it is entirely up to you. Of course, you want that person to know what they are doing – anything they do that contravenes the Act is the same as you contravening the Act. If they say “sorry dear, we don’t allow children in this property” it will be you hit with $4000 fine for unlawful discrimination. If they enter the property without proper notice, you’ll be coping $1000 penalty. If they don’t have the property clean and tidy for the next tenant, you could be facing $3000. If they fail to lodge the bond, again, it will cost you, this time up to $1000. And what if they just want to keep popping around to make sure the tenants are comfy? If it’s a breach of tenant’s privacy, you’re facing a $2000 fine. As Homer would say, ‘Doh!’.

In the face of such steep penalties for doing the wrong thing, plus the risks of your relatives not knowing how to get the rent paid, or choosing tenants who will look after your property, doing inspections, and getting maintenance done properly, property management by suitably experienced property managers is darn cheap. When you need to go away, choose Rental Results to manage your properties and keep you on the right side of the law and your money in your pocket.

Overcrowding Issues

We ask people why they want to move home when they look at rental properties we have available. The last year or so has had more and more people answer 'our house is too crowded'. We have begun to ask just how many people makes their house crowded. The worst number reported to date is 11 in a 3 bedroom house, four generations of the one family. We can't say how many people are under-reporting. Overcrowding has the stigma of poverty. We know a number of people tell us there is 4 of them in one bedroom, and we don't know how many more are in the lounge room floor. For tenants, overcrowding is an issue with health implications - mental and physical. There are safety and security issues. Hygiene is an issue - will there be hot water for everyone? Where will towels dry? Is there room in the kitchen to wash the dishes? Can that number of people be fed easily in a standard sized kitchen? Is there someone too quiet or too weak to get their share? And diseases love crowds - they get transmitted easily from close contact, particularly in humid rooms from many breathing bodies. Tensions run high and tempers flare - just check any reality TV programme to see what can happen when people are cooped up together too long. For landlords, more people has building issues - there is a lot more wear on the building and fittings. Stove elements burn out quicker when cooking large heavy pots full of food. Paint gets scraped, bathrooms never dry out between showers, bedrooms and living rooms get damp from all the expiration and perspiration, so mould develops everywhere. Plus, they have the risk of someone accusing them of providing unsafe and unhygienic housing. Saying 'it was fine when they moved in' doesn't really convince the housing inspector. There are large penalties for unhealthy homes - what is caused by the building and what by the tenants will be disputed. Are homes overcrowded because rents are too high? Maybe that is a factor for some. However, a home in Porirua rents for as little as $12 per room per day. Just 20 minutes down the road in Wellington city, this could be $33 per room per day, and occupied by a student, almost 3 times as high a cost. So no, cost alone is not it. Are homes overcrowded because people do not pass the checks prudent landlords do? I think we could be onto something here. Someone with a steady job, a steady family structure, a steady head, and a steady renting history should not struggle to find themselves somewhere to live. Those who seem to be piled in with all the relatives seem to be out of work, out of their relationship (for now), out of their tree, and out of favour with their previous landlords. Hmm, no wonder no one wants to take a chance on them. What's the solution? I don't think the landlord has much chance of sorting this out. Asking 'how many free-loading relatives will move in with you if you get the property?' is not likely to be popular nor solicit an honest response. Be careful with your tenant selection, restrict the number of occupants in the property, inspect regularly and hopefully tenants will get the message overcrowding is not good for them, nor popular with you.

EQ proofing for your house

When Christchurch was struck with a 7.1 magnitude earthquake in September 2010, there was a lot of damage caused by chimneys and hot water cylinders (HWC) when the houses were otherwise OK.

Why were these two items so destructive? Firstly, they weigh a lot. A 180lt HWC weighs around 200kg. That's as heavy as two rugby players. You wouldn't want them charging down the hallway at you, particularly when you are none too steady on your feet. I am sure you don't need me to explain what damage a chimney stack of bricks would do if it landed on your foot, or your head.

Secondly, they are made of different materials to the rest of the house. Most houses are wood, and have some flexibility in a quake. Bricks and metal cylinders are less flexible, so they get out of sync with the waves of an earthquake and pull loose of where ever they are supposed to be, relative to the rest of the structure. Out of place means causing trouble.

Thirdly, chimneys stick out a long way. They need to in order to do their job, but this also has the effect of leveraging the motion of the quake, and the further something is from the ground, the more it sways. Again, recipe for disaster.

A lot of this damage was preventable by simply strapping these items to the framing of the house to prevent them going their own way when the urge strikes. If you have a new HWC put in, your plumber should give it suitable seismic restraints. In my own house, the former owner has also secured it with a frame of wood around its base so it can't hop away. This is great, because not only will the HWC remain where it is, the water will be available for drinking if the main is disconnected.

If you have a brick chimney on your house or rental property, also get it strapped and secured in at least 2 directions. At worst, you'll never need it. At best, you'll save damage to your property, and maybe even save someones life. It is a pro-active insurance policy. Your regular insurance can't promise quite the same protection, so sort it out now.

Remember, Christchurch did not expect a 7.1 magnitude quake in September 2010, and it certainly did not expect a 6.3 in February 2011 as it was a fairly earthquake free region. If it can happen there, it can happen anywhere. Get prepared.