How to advertise properties for rent

You've all seen them, the ad reads:

 "3Br, close to shops and kindy, open fire. Avail now, suit QUIET professionals. No pets or smokers. Bond 4 weeks, plus 2 weeks rent to be paid in advance."

What exactly is in this for the tenant?  It's a good property from which they can set up a sniper position to pick off preschoolers? (Read it again, hear the command).  Tenants who shout 'Quiet!' frequently would be great?  I once saw an ad that mentioned it was close to the bottle shop.  Were they seeking alcoholics in particular?  I can only wonder why.

Obviously there is a bit of an art to writing good ad copy.  There's also an art to taking great photos, but that a topic for another post.

Put yourself in your ideal tenants shoes.  Don't know what your ideal tenant looks like, or what their footwear preference is?  If that's the case, and you are genuinely stumped, we can help with that.  We love the challenge of making your property appeal to great tenants.

Who are great tenants?  Ones who pay the rent when it is due, don't damage the property in any way, keep it clean and tidy, especially when they leave, and don't annoy the neighbours or yourself.  Sounds fairly achievable really, anyone should be able to do that.  Sadly, they don't.  There are also nuances of great, and good copy gets the really outstanding ones excited to see your property.

How do we get to them?  We sell the property to them with love.  We seduce them with the aspects of the property that will give them the life they always dreamed of.  We appeal to their imagination and their intellect.  We flatter them.  We nurture their desire to be special.  We tap into their desire.

Exactly how do we do that?  Your property is more than the bricks and mortar that makes it.  It is the location, the aspect, the way it relates to its section and the neighbours.  It is the people around it.  It is how they get to work and play.  It is what makes your property fit in, and stand out.  It is the value as opposed to cost.  We tap into that and talk about more than the number of bedrooms the house has, because all properties have something to offer the occupant.

What we don't do is turn people off.  It doesn't mean lie or obscure bad aspects, but instead find the upside.  It has a lot of stairs?   "Save gym fees, get a great workout each time you walk to your front door".  Its got a tiny outdoor space? "Easy care courtyard makes weekends all pleasure, not work mowing"... you get the idea.  It's standard 'real estate speak', and it works.

Don't punish new tenants for the crimes of old ones.  Leave out the bits that clearly show you had a bad experience ("clean and tidy tenants wanted"), instead be the landlord you want to be, the one who has a great professional relationship with your tenants.  Make it clear your ideal tenant is the one that the property best suits.  This makes tenants put their best foot forward, and they'll be oohing and ahhing at your showings to show you they love it, and you'll love them.

I notice some landlords don't seem to love their properties.  While you should never buy an investment based on emotion, you should be excited about some aspect of it, even if that is the return it brings you.  If you truly can't find something about the property that could excite you or anyone else, have someone else have a crack at it.  We have a rule in our office.  If you don't love the property, you don't write the advert for it.  How you feel about a property will show in your writing, so we make sure we manage properties we have a reason to love.  And not surprisingly, we get lots of great tenants wanting to see the properties we advertise.

Things you shouldn't say in the advert include matters of bond and rent as they can be worked out when tenants see the property.  If you are adamant on no pets, then sure, have that in there.  Likewise you can discriminate about smokers.  Any other choices you make to thin out prospective tenants needs to pass the 'Human Rights Act'.  So, you can't say 'no children', or 'married couples preferred', or 'Christians ideal' or 'no Australians'.  Trust me, I've had thousands of tenants.  Good tenants, and bad, exist in every way age shape and form, so forget your biases.  You can't even say 'professionals' because that implies blue collar workers are not going to get a look in.  What you mean is 'someone who won't go into rent arrears', and again, that doesn't need to be said as it is an expectation of every landlord.  If you really don't want children in your property (and I honestly can't understand why not, there are good ones) then only buy one bedroom places and limit the number of occupants to one person only.  You can't reasonably limit the number of occupants in a three bedroom place to just one or two, so don't try.

We love using video to promote our properties, and we use it whenever we can to really get someone 'in the moment' of being there.  Again, there is an art to doing this well, which there isn't room to go into in this post.  Video really solves the problem viewers have of 'how does this photo relate to the others?' and you'll get committed prospects turning up to see it.

Make sure you have clear contact details so people can see the property and apply.  I've seen plenty of ads where the only way to contact the landlord was via email, which could be too slow for tenants looking at many properties at once.  What's wrong with taking some calls? A very successful landlord friend of mine has it down to an art and in under a minute can give prospective tenants all the key points they need to know.  We use a cool booking system to get tenants to property showings, it works really well to reduce no-shows and saves us buckets of time.

If you want to see examples of our great ads in action, please view our Trademe listings here.  If this doesn't bring up any properties, it's because they've already been snapped up by eager and awesome tenants.  Contact us to have the same happen for you.

When is a good time to do a rent review?

I've been asked to answer this question.  It's a good one, and my glib answer is: Any time, and all the time!  Think about it when shopping for a new property, refinancing, insuring, renovating, or any other prompt.  Every time you think about your investment property, you should be asking yourself, "is the rent at market level?".   

If the answer is "no", then I hope you are getting above the average for your area, and if not, you are resolved to do something about it!

Section 24 of the Residential Tenancies Act (RTA) 1986 is your friend here, and it says rent can be increased by Landlords every 180 days (6 months, to save you counting your fingers and toes) so long as notice is given in writing 60 days (2 months) in advance, and the amount of increase is specified.  So while you can review it in your head every day, you can change the rent the tenant pays every six months, with two months notice.  So, four months after the last increase took effect, you can tell them it's increasing again in another two months time.  Yay.

There are a few conditions on doing rent increases.  For instance, if you have a fixed term tenancy, you need to specify in the tenancy agreement that you can increase the rent within the fixed term (periodic tenancies don't need special wording).  Otherwise, sorry, you need to wait until you write a new tenancy agreement towards the expiry of the current one.  The RTA helpfully provides a few choices of wording to put into your fixed term tenancy to allow you to do so in Schedule 1.  Provision A is the best for most situations, so copy it word for word into your tenancy agreements.

The rent increase must be in accordance with market rent.  You can't just decide to double the rent, at least, not unless everyone else has done the same (or it has been far too long since your last review)!  The onus of proof of what is market rent is on you, so make sure you keep a copy of the information you consulted when assessing it for at least 3 months after the new rent is due, as it could be challenged.  Look at advertisements for similar properties to yours, and look on databases such as Tenancy Services.  Make sure you are comparing apples with apples, and you are fairly comparing your property with others.  Remember, some areas have a significant difference in quality of most owner occupied properties to the quality of most rental properties.  If your property is in the former rather than the latter category, add a premium as it will be better than most rentals.  Here's where it pays to inspect your property regularly too so you can be sure it's current condition measures up to the competition.  It's no good having your tenants move out and being unable to get the same rent you asked them for from anyone else as it is too run down.

Doing maintenance at the property to keep it in good condition makes it easier to do rent reviews.  You don't need to specify that is the reason you are increasing the rent, tenants will accept that you have outgoings which need to be covered.  If they like living in a quality property, they will pay for it.

You can increase the rent with the consent of the tenant if you make substantial improvements to the property which amount to a material benefit to the tenant, or you vary the terms of the tenancy to the benefit of the tenant.  So for instance, you could agree to install more efficient heating if the tenant pays more rent per week.  Or you could take over the tenants lawn mowing duties.  You can also increase the rent for unforeseen expenses.  For example, after the Christchurch earthquakes, insurance costs all over the country increased drastically, especially for apartments.  This cost could have been passed onto tenants, even if the last increase was less than 180 days ago.  You may need to get a Tribunal order to do so, but check out Section 28, 28A & 28B of the RTA for more information on this.

Should you haggle with tenants over rent?  I never agree to lowering the asking rent when advertising a property.  You know, the prospective tenant who says  "I'll be a good long term tenant, knock $50 off!".  My response is along the lines of "If I market it at $50 pw less, I'm going to have a queue around the block of tenants to pick from who want to stay long term.  Why should I choose you over all of them?".  This usually ends the debate, and they either agree to pay the asking price, or they go and bother someone else.  Either way, it's a win for me.  Trust me, the ones who negotiate a longer lease for lower rent end up breaking their lease early, or causing you pain in other ways.  It's a law of the universe or something.  It isn't personal, it's just negotiation.

If it's a current tenant who negotiates when I'm increasing the rent, there are a few techniques that can help make everyone happy.  For example, when a tenant says "but I'm a good tenant, why are you increasing the rent by so much?".  My answer is "I took that into account when looking at your rent increase, so I kept it as low as I could.  Imagine how much more it would be if I didn't appreciate you so much".  Or for a tenant who always wants to haggle, put it up more than you were hoping to get, and let them negotiate you down.  If you want another $10 per week, ask for $20, then be willing to yield to your desired increase.  What's the worst case scenario?  You get more rent than you hoped to.  Gee, that's terrible.  Just be sure your rent is still within the realms of market rent.  You don't want to do an ugly rent rise on a painful tenant only to have them take you to Tribunal over it and win as it was way out of the ballpark.  If you really want a bad tenant to leave, give them notice to do so.

What happens if you change your mind, or made a mistake on the notice?  You can withdraw your notice, or correct it as long as it was a genuine mistake.  So, you transposed some numbers or got the date wrong, no drama, just send an amended document as soon as possible with the correct information on it, and a note stating why this notice is different.  See Section 24(4) of the RTA for more on this.

A little known rent increase technique is to always vary the rent on the same day of the year.  I don't recommend this.  Nor do I recommend specifying in advance of the formal notice of rent review the maximum or actual rent you will be seeking, for instance, don't say in your tenancy agreement "the maximum rent increase will be $30 per week at each six monthly review".  You don't know what the future holds (Christchurch taught us that), but I'm pretty sure you don't want the future to hold a bank foreclosure on your property because you couldn't increase the rent to what it should be.  It might seem a pretty decent increase now, but what if the tenant stays there for the next 20 years?  $30 per week might be peanuts then, not worth your paperwork, so never be specific.  If tenants are concerned about rent increases in their tenancy, assure them rent must be within market levels and if it isn't, they can apply to Tenancy Tribunal for an assessment.  I'm proud to tell tenants that in all my years as a landlord with thousands of tenancies, I've never needed to go there for a rent review matter.  That generally sorts out any residual concerns.

If you think you are not getting the rent you should be, ask us for an appraisal.  We've made property management stress free and essentially cost free for many investors, simply by taking great care of their properties for them and increasing the rents to what they should be, in many cases, keeping great tenants happy in the process.  It is an art form, and we are happy to share it with you.

Twenty tips for renovating while a tenant is in your property:

Some tips for renovating while a tenant is in your property:

1. Make sure your tenant wants the renovation.  If they don’t, they won’t be so happy to tolerate the mess and inconvenience of it.  You might be better to have them move out first if they are happy with the status quo, or have other needs that will make a renovation difficult for them (e.g. asthma, young children).
2. Tell your insurance company what you are planning on doing and make sure you have cover in place.
3. Get consent where needed from the Council.
4. Keep all members of your team informed – don’t forget to tell your property manager and other parties the plans.  Listen to good advice!
5. See if the renovation can be done when your tenants are away on holiday.
6. Allow plenty of time for overruns.  If you think it will take 5 weeks maximum, tell your tenant it will be 8 weeks or more.  Better to be finished early than late.
7. Have any agreements with your tenant in writing.  Include what you are going to pay for power usage and any rent adjustments during and after the renovation.  Be clear on when those rent changes will occur - it could be a date, or an event like 'the painters have finished'.
8. Have a good budget for contingencies.  You don’t want to cut back on what you promised your tenant as unforeseen things cost more than you planned.
9. Ensure all facilities are working at the end of each day if the tenant remains in residence.
10. Have good contractors who understand the importance of a good relationship with the tenants, and won’t go off to some other job before yours is done.
11. Talk to all your contractors before the job begins to find out what their preferred timelines are, and what they need done before they come on site, and who else can or can’t be there at the same time.  Get a project manager if needed.
12. Do what you can to smooth the waters between the tenant and the contractors.  Take all concerns seriously.  Offer incentives to all parties to keep things sweet, such as rent discounts while work is going on.
13. Be prepared to spend money to get the job done faster, rather than soldier on doing it yourself.  You will save you money on compensation to the tenant later.  Don’t work late into the night if the tenant is in residence, be mindful of their need for peace and privacy.
14. Make the effort to do things that stop dust and mess spreading, and clean up at the end of each day.  Use your own cleaning tools, never the tenants.
15. Keep the workplace safe at all times – think about where the building materials will go, and any rubbish being removed.  Have suitable warning signs and barriers (and better yet, don’t do this in any households where small children are present).  Keep your building and building materials secure – you don’t want someone throwing your paint around where it isn’t wanted.  Consider installing a shed on the property temporarily to store your stuff – don’t take over more of the tenants property than absolutely needed.
16. Don’t leave them cold through Winter.  If possible, do major renovations when the weather is warm and calm.  If you’ve opened something up and the weather turns cold, a previously agreeable tenant will change their mind, to your cost.
17. Keep in mind, ‘what’s in it for them?’ – you getting a better valued property doesn’t matter to your tenant.  Them getting more comfort and cheaper living costs may be more appealing, so act accordingly.
18. Have a planned stop point.  It’s tempting to let one thing lead to another, but it can wait, really.  Plan where you will stop and stick to it.  You can always start another renovation in the future.
19. Either stick to what you have agreed with your tenant, or better the deal for them, but don’t allow yourself to be blackmailed by unreasonable demands.  If things go badly and you need to defend your actions, you will be all right in the end if you can show you had an agreement, and when unforeseen things happened, you acted quickly to make things better.
20. Keep the paperwork for 7 years.  You will forget the paint colour, or the details of the agreement with the tenant, or the contractor who offered the guarantee, so hold on to the paperwork until there is no other issues that could possibly arise from the renovation.