Minor upgrade to unit achieves 20% rental increase

As a property manager, Prakash Gosai has dealt with all sorts of challenges, from following up on rental arrears to repairing damage to property to cleaning up after tenants when they leave unexpectedly, but the death of a tenant wasn’t something he expected to face.

However, when the brother of a long-term tenant phoned Prakash to say his brother’s life support had been switched off, Prakash knew it was his responsibility to ensure the situation was handled with respect.

The background

 “The tenant had lived in the property for eight years but didn’t have much family in New Zealand,” explains Prakash. “When he died, I spoke with the landlord about allowing the tenant’s family time to clear his possessions.

“The process took a couple of weeks, which is longer than we would usually have a property vacant, but in this case the situation required it.”

The challenge

Prakash suggested to the landlord it would be an opportune time to give the property a spruce up.

The unit was part of a block of five and although it didn’t need a major overhaul, Prakash believed some redecorating would enhance it.

“It wasn’t damaged but it did look a little tired, so I organised new carpets to be laid, curtains hung, and a lick of paint.”

The outcome

Prakash had overseen the upgrade of another unit in the block, after which he was able to increase the rent from $180 per week to $220.

“A relatively simple upgrade to the property meant the landlord was able to attract a higher quality of tenant living in the property, something the surrounding properties which are owner-occupied had previously complained about,” says Prakash.

“Once all the units are redecorated, I believe the rental return will be significantly higher, and the units themselves will have increased in value,” Prakash says.

The upgrade to the one-bed units have taken two-to-three weeks. While this means the landlord doesn’t receive rent during this period, it is something Prakash encourages all his landlords to prepare for.

“I tell our owners to budget for 42 weeks occupancy per year, rather than 52 weeks. This just allows for time when we need to find new tenants, or in this instance give it a makeover. I also advise owners to set aside a slush fund for situations such as a hot water cylinder bursting. It’s good planning to have that financial means if and when situations do arise.”

 

Prakash Gosai

P: 07 856 4500

M: 021 688 906

E: prakashg@lodge.co.nz

www.lodgerentals.co.nz

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