Why you should get a rental appraisal
Business Development Manager, Steven Loveridge offers his view:
A large part of my role as a Business Development Manager for Harcourts Grenadier Accommodation Centre is to complete rental appraisals. A rental appraisal is an estimate of the market rent of a property. I often get asked how we determine a rental value on a property. The answer is varied as it does depend on many different factors.
I will obviously look at comparable listings that we have rented which are similar in size, quality and location. In some newer subdivisions, the similarities are very close between properties and the rental appraisal is easier to complete. For other properties, the quality and size of a property can be varied in a suburb. Therefore more work is required to complete a rental appraisal. Things like the quality of the property and the number of bedrooms, bathrooms, garaging and heating options are considered. There are other things to consider, in particular, the time of year with the spring/summer months having more demand than the winter months. Location and school zones are large components of assessing a rental value as well.
I do often get quoted by property owners and tenants the market rent statistics that are provided by New Zealand Tenancy Services. These are helpful as a guide but might not be true due to the following:
1. They don’t distinguish between furnished or unfurnished properties.
2. Not all landlords collect bonds. Research from Massey University suggests that up to 18% of landlords either don’t collect bonds or lodge them. That is a decent chunk of data that is not reflective in the rental statistics.
3. The data reflects the rent at the beginning of the tenancy. If the rent is increased throughout the tenancy and the bond stays the same then the increase will not be reflected in the data.
Properties listed on the websites for rent offer another source of assessing a rental rate for a property. Again there are some inaccuracies as the listed rental price can often be different from the price the property is finally rented for. Tenants do often offer less and owners negotiate the rental rate to get the property rented. I always say to owners you must be “in the market” not “on the market”. This means listings that are priced too high on the websites will be missed by the potential tenants as you are not competitive with similar rental properties. Why would a potential tenant look at a rental price of $460 per week when all similar house prices are in the $420-$440 per week price range. It is important to get the rental price correct from the start.
The benefit of a property management business like ours is we are dealing with the renting of properties every day and assessing rents. We are constantly talking to salespeople and investors about rental values. The residential rental market is like any other market that sells a product or service, it is affected by different factors for different reasons. It is important to have a professional property management company to provide rental appraisals for your property. We provide free rental appraisals if you are considering your next property move or would simply like an update on local market conditions or an estimate of the market rent for your property.
Contact us today: 0274 838 115 or firstname.lastname@example.org.
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