When we say rents have gone up in Manawatu/Wanganui by 9.1% it doesn’t sound like much, does it?
Sometimes a figure itself can be hard to convert into something meaningful. So, let’s look at it this way: For every $100 of rent a landlord charged a year ago, they are now charging $109 on average – or $9 more income per week.
If you own an investment property that you rented out 1 year ago for $300 per week, on the current market you now could achieve $330 per week.
Four hundred dollars a week this time last year would be $440 per week in the current market. Most property investors in New Zealand only own one rental property. An extra thirty or forty dollars per week, can make a big difference to their household income. All investors must top up the costs involved in their rental properties – and most often this comes directly out of their household budgets.
Unexpected costs through maintenance, compliance, insurance changes, rates and much more can mean the household budget doesn’t go as far as intended.
A change of 9.1% equates to at least $20 per week in the current market, which is over $1000 per year.
Some owners like to rent their properties at a ‘lower than market rent’ in order to help people socially when housing is short. While that is commendable, they shouldn’t do so unless their own day-to-day living budget is secure.
Recently, I was pleasantly surprised when my own property manager recommended a $30 per week increase on a property rented a year ago for $290 per week. As a property owner, I can leave the rent where it is, increase it somewhat towards market rent or move it to market rent.
If you’d like the same information for your own rental property then please get in contact. We can provide for you (at no cost) an obligation free rental appraisal report that details the current market value for your property – so you can make the decision for yourself.
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