Tips For Running A Rental Business In New Zealand

Investing in the property market as a short-term or long-term rental owner can seem like an easy way to make a passive income. But the truth is, it takes time, effort and money to get it right! If you’re thinking about establishing a rental business in New Zealand, this article outlines all of the things you need to consider before taking the plunge.

You can get a good idea of what other property owners are doing and the rental prices they are charging online via this source. In addition to rentals in Darwin, Sydney and Perth, it showcases properties in all corners of New Zealand. This platform not only provides a glimpse into the diverse real estate market across Australia and New Zealand but also offers valuable insights for both landlords and tenants, helping them make informed decisions in this dynamic rental landscape.

The following tips are a step-by-step guide to get your rental business up and running, from idea conception to online listing.

Do your research

Before you purchase a rental property or transform your current residence into a holiday business, it’s essential that you do your research. Check out what other hosts are doing in your chosen market and whether it’s better to establish a long-term rental business or target tourists looking for short-term stays. Figure out whether the income returns are worth the upfront investment or mortgage and the ongoing costs of maintaining the property to ensure it meets current standards.

Understand your legal compliance

Among the most important things to consider before setting up a rental business are your legal obligations as a landlord. You must understand the local laws and regulations that govern New Zealand and check with council legislation regarding their rules. In some parts of the country, legislation has been passed to tighten regulations, particularly around the establishment of short-term rentals, so take the time to understand what this means for your situation.

Ensure your property meets building and health standards

Not every property is in suitable condition to be rented out and it’s essential that yours meets current building and health standards to ensure the safety of your tenants or guests. For example, a house or apartment with unsuitable fire safety measures or poor sanitation is unlikely to meet current regulations. Adequate ventilation and fixed heating devices are essential in New Zealand rental properties, as are ceiling and underfloor insulation.

For further information on establishing a rental business and meeting your obligations as a landlord, New Zealand Government’s Tenancy Services website is a great resource.

Consider your insurance options

While insurance isn’t mandatory for running a rental business in New Zealand, it does give you peace of mind that you will be covered financially if damage occurs. It’s best to invest in a comprehensive insurance policy that is designed for either short-term or long-term rentals, whichever you are pursuing as a business owner. Insurance policies for rentals usually differ from home insurance policies, so you may need to take out an additional policy if you are renting out your current dwelling.

Purchase your property

If you don’t already have a property to rent out, then it’s time to start browsing the market. For a rental business that is focusing on short-term, holiday stays, then it’s best to invest in an area that has a thriving tourism market or is an up-and-coming destination. In New Zealand, properties in the heart of the cities, at beachside towns and near the country’s natural attractions all have the potential to do well as short-term rentals. Before buying any property, consider the costs of any renovations you may need to do before renting it out. You should also keep in mind ongoing council rates and maintenance costs and how these stack up against potential rental earnings.

Prepare your property

Unlike long-term rental properties that tenants make their own with the addition of furnishings and decor, holiday rentals should be set up and ready to go when guests arrive. Not only do you need to ensure they are safe, comfortable and homely, but that all of the appliances and amenities are in good working order. The last thing you want is to be receiving constant calls from guests asking you to fix “such and such”. While preparing your property, it’s good to have an overall design aesthetic in mind or invest in the services of an interior decorator if you don’t feel comfortable doing it yourself.

Create your listing

Once your property is set up and ready to go, it’s time to create your online listing. This should include a detailed description of the property and what it offers to guests, as well as a little about the location and any nearby attractions. If the property is unsuitable for children or people with limited mobility, it’s best to be upfront about this to prevent issues down the track. Also, don’t forget to include high-quality photos that accurately capture the space - this may be a job for a professional photographer if you want the best results!

© Scoop Media