As fewer people are able to buy their own first homes, we are noticing a trend towards investors picking up on the lower end properties for use in the rental market.
I have recently carried out pre-purchase inspections for a client who has purchased a number of Invercargill properties in the price range of $90000- 170000.
Typically, maintenance and upkeep on the average Southland home has been a bit slack, with an attitude of “if it isn’t broke, don’t fix it” instead of “a stitch in time saves nine”.
The result of this approach is that most older cheaper houses on the market have a significant catch up element which may or may not have been factored into the asking price.
After the pre-purchase inspections, my client had a documented list of matters which required financial input and so with this ammunition, he was able to either negotiate or renegotiate a purchase price which effectively gave him a return on his investment.
Proposed WOF for rentals
There is gathering momentum for improving minimum housing standards in New Zealand. In 2008, the Business Council for Sustainable Development identified that at least 1 million of the 1.6 million existing homes in New Zealand were poorly performing, meaning they are cold, damp and difficult to heat. Subsequent research has seen estimates of approx $13 Billion annually as the social cost of injury from the home.
Proposals for compulsory WOF’s on rental properties are currently being hotly debated and we have government promises of action in this area.
In light of the above, we have developed a product for use by landlords and existing home owners to assist them in forward planning and budgeting.
So now as well as the Building Report, we have the Maintenance Report
The Maintenance report is an inspection carried out on the property in a broadly similar way to that of a pre-purchase inspection, where we identify any current and future maintenance requirements.
Any weaknesses or deficiencies with the property will be pointed out.
In the course of the inspection, approx 30-50 photographs will be taken in the process of gathering information, and these can be forwarded as required.
The focus of the report will be on preventive maintenance and advising on how to prolong the service life of the various components. We will advise on what we consider to be the most viable course of action to take with any deficiencies found.
A 31 point check-list which forms the basis of future warrant of fitness for rental properties methodology will also be worked through, so that owners will be aware of how their property stacks up and so be able to plan for subsequent potential future requirements.
Insurance Valuation Assistance
With the changes in the insurance industry, putting the onus of replacement value for houses on the owner, we have been experiencing quite a bit of demand for assisting owners to this end. The potential liability issues arising from us setting a value on a property would make any report unaffordable, so instead we offer a service which involves accurately measuring the property and generally assisting the owner in arriving at a figure with which they are happy.