Demand for rental properties in the Wellington region has been unusually strong lately. Typically the last month of winter and first month of spring is one of the quietest rental periods as people prefer to stay put and keep warm rather than look for a new place to live.
Whether a one, two, three or four bedroom property, one major principle still applies to minimize vacancies: good properties that are proactively maintained will be attractive to tenants and tend to rent faster. Whether moving out of your own home and looking to rent it out or whether you are buying another investment property to add to your portfolio, it is important to remember that good tenants want to live in good quality accommodation. A good tenant with a good job doesnt want to come home to a tired property with pot holes in the driveway or wish to cook in a 1950s kitchen that is well overdue for an upgrade.
Outside of tidy kitchens and bathrooms there is a preference for neutral decor tones. Tenants also prefer properties with good heating. We have seen tenants move from homes without reasonable heating into homes with heat pumps. Perhaps anecdotally, heating preference could explain some of the movement in August as it was one of the coldest months on record.
Tenants are prepared to pay more rent to live in good quality accommodation and it makes sense as an investor to attract the best tenants at the best market rental price.
Investors are still buying and adding to their portfolios. An example from August is a 25 year old couple on one income who have purchased their 5th investment property. Following the rules of looking at investment as a long term plan, the couple raised finance by having confidence that the property would rent fairly well given its condition and attractiveness to tenants.
The couple purchased the investment property inStokesValleyfor $177k. The property they purchased has all the hallmarks of a good investment property. It is a well-presented home in a sunny, slightly elevated spot inStokesValleyclose to all amenities. With two bedrooms and open plan living, it has the attractiveness that tenants are looking for being neutral in decor with a good kitchen, modern bathroom and decent heating.
Being on one income, it was important for the couple that the property rented quickly following settlement day. Photos and advertising were prepared in advance and the property advertised as soon as the keys were picked up. A great tenant (professional, early sixties) was secured four days later and moved in a week after settlement. The couple achieved market rent of $280 per week.
The property is proving to be cash neutral. The rent is paying for the mortgage including principal, rates and insurance. These smart investors have another asset that they will own in 20 years time when they are in their mid-forties.
There are great rental properties like this one on the market for smart investors to keep an eye out for and to continue to add to their property portfolios. Good properties are renting very well.