Being a landlord is “becoming increasingly difficult”
Andrew King, of New Zealand Property Investors' Federation, has claimed that New Zealand's rental management and industry regulation are trailing behind Australia by around 16 years – with many rental property owners saying being a landlord is now “becoming increasingly difficult.”
Property Brokers held events for clients and partners for six weeks to discuss the amendments to the Residential Tenancies Act, Healthy Homes Standards, and the regulation of the industry. A majority of attendees pointed out that being a landlord is “becoming increasingly difficult.”
“The unintended side-effect of what the government has introduced is likely going to result in several significant shifts in how kiwis run their investment properties,” Property Brokers said.
“Will owners be able to do it themselves? Will the new licensing regime be applied to all landlords or only 'large agencies' as detailed in the new legislation?”
King has pointed out for years that the way New Zealand manages and regulates the rental industry is decades behind Australia as 80% of rental properties in Australia are professionally managed compared to around 40% to 50% in New Zealand. Every state in Australia also has detailed licensing requirements and governance for property management.
“With the changes to the RTA and licensing regime, this inevitably is where New Zealand is heading. The DIY landlord could well be something of the past,” Property Brokers said, noting that the amended Residential Tenancies Act requires landlords and agencies to keep records for current tenancy and all documents for 12 months.
“In our opinion, requirements in this specific area of the ACT are equivalent to the software that professional agencies use and pay for to comply with the regulations,” Property Brokers said.
“Have a look at what is required now on a tenancy agreement under Section 13a of the RTA! If you don't have access to these systems, we don't see how it is going to be possible to meet this new requirement? A common theme that we have picked up on throughout the RTA Roadshow is that there's a growing trend of ‘Mum & Dad’ investors exiting the market. It is becoming too complicated, and many of them have been burnt badly in recent times. When these properties sell, they are going to owner-occupiers or large investors.”
