The latest QV House Price Index figures were released this week and the Bay hit another record high over August. Average house price for a Tauranga property is $633,638, up 28.5% from the same time in 2015. Nationwide the average is $612,527. The figures show that every suburb in Tauranga saw property values increase in the last 12 months, often by more than 20%! The top three suburbs were Parkvale (35.5 per cent), Greerton (35.2 per cent) and Gate Pa (33.8 per cent).
Interestingly actual volume of sales in Tauranga dropped 11.1% last month compared to 2015. We believe the huge price growth we have seen this year may slow with the new LVR restrictions coming into play, however there is still strong demand from first home buyers who want to move to our stunning region.
Average rent has also increased in the last 12 months and the good news for investors is that demand for rental properties in Tauranga and Papamoa is still very strong. As discussed in previous articles, areas such as Greerton, Gate Pa and Parkvale are seeing huge rental demand. Papamoa also remains a favourite for families new to the area.
The Council has announced that structure planning for a new urban development area at Te Tumu is underway. Te Tumu land lies between the eastern end of Papamoa Beach Rd and the Kaituna River. This development is expected to house between eight and fourteen thousand people, depending on how many homes are built. Once the planning stage is completed the actual development is expected to start in 2021.
New construction and development in Tauranga is still going gangbusters as well. In August there were 254 residential and building consents worth a total $62 million!
Finally, good news for Tauranga residents who find parking in town an issue. With construction of the top floor now complete, the Elizabeth Street building now provides 342 public parking spaces plus 278 leased spaces, and is open 24 hours a day, seven days a week.
Ever wondered why some people find it easier to get a rental property than others? At Connect Realty we pride ourselves on managing quality properties across Tauranga, Papamoa and Mt Maunganui, and having quality tenants in them. That means we vet all potential tenants to make sure we find the right candidate for the homes we manage.
If you are finding it difficult to get accepted by rental agencies, or keep missing out on the best homes available, then we have some top tips that may just help.
Property Managers and landlords like to see references. Make sure you choose referees who are in respected positions (e.g. landlord, employer, community group leader). Friends or family, no matter how much they love you, do not make good referees. We recommend getting a reference every time you vacate a home, and keep these for each new landlord or property manager to see. Provide contact details and make sure they know they may be called.
Having a pet means you will be limited in which properties you can rent. If you don’t have them already then we recommend not getting a pet as it makes it very hard to get a property. The main reasons are potential damage from accidents inside, pet fur and/or hair in carpet and mess they can cause around the outside of a property. Even if your current landlord is ok with pets, your next one may not be so keen.
We recommend that you consider quitting. There are few landlords or property managers who are happy to place tenants in a home when they are smokers. Smoking inside properties causes lots of problems, especially smell. There are free online quit programmes that can help you, and local support groups as well. Some apartment complexes also ban smoking from balconies and decks.
Appearance & Attitude
The saying goes you can tell a lot about a person by the way they present themselves. If you want to impress property managers or landlords then we recommend you turn up on time, dress nicely, and be honest. Property managers and landlords are busy people too, they don’t want to wait around for applicants who don’t show the courtesy of showing up on time.
At Connect Realty we strive to be open and honest to all applicants and tenants, and if we suspect you are not telling the truth we will not rent to you. So be open and honest during the application process. Provide all the information asked for. The more thorough you are, the more seriously your application will be considered.
We also recommend that you ask questions. The rental relationship has to work two ways. You need to be able to communicate with the landlord, and they with you. If you ask questions you will both be able to better assess how that relationship might go.
If you’re looking for a rental property in Tauranga, Mount Maunganui or Papamoa then have a look through our properties for rent tab on our website – https://www.connectrealty.co.nz/properties-for-rent. If you see a property you are interested in viewing please phone for the address. We will walk you through our application process from there.
There are actually many rules for real estate investing, so many that we could probably write a Connect Realty property investing book! However, these are some of the key rules that we think you should consider when you are about to purchase your first investment property.
1. Goal Setting
We recommend you set specific goals for your property investment, or investment portfolio. This isn’t your wish list, but rather clear and detailed goals that you want to achieve by purchasing property as an investment. Be smart about these goals, and remember that property should be a long-term investment. Things to consider include the number of properties you want to acquire, your annual return on your investment properties, type of properties you want to own etc.
Educate yourself. The more knowledge you have about the location, the market, future council plans etc, the better informed you will be and the more likely you will succeed.
Our years of real estate expertise in the Bay of Plenty property market, including Tauranga, Mt Maunganui and Papamoa, means we can give you key advice about what areas are growth areas, where there is high demand for rentals, the types of rental returns you can expect etc.
3. Don’t Speculate
We recommend you consider your property as a long-term investment. Even though Auckland is experiencing un-seen growth in house prices, you never know when a market will peak. We think it is wiser to not chase after fast appreciation, but to invest in property where the numbers make sense from the beginning.
4. Find A Good Mortgage Broker & A Great Accountant
We recommend shopping around when it comes to arranging a mortgage for your investment property. Mortgage rates are competitive in the current housing environment, so take advantage of this and meet with mortgage brokers to see what they can offer you. You may be surprised how much this can save you in fees and charges.
We also believe a great accountant is key to peace of mind for first time property investors. Outgoing and ingoing expenses should be managed by a qualified, reputable accountant. This will become even more important as your portfolio expands. The costs associated with the accountant can be negligible when compared to the savings a professional can bring to the business.
5. Use Professional Property Managers
We may be a little biased about this, but ask any good real estate investor and they will tell you to never manage your own properties. Property management requires a solid understanding of New Zealand tenancy and landlord laws, good marketing skills, and strong people skills to deal with any tenancy issues.
At Connect Realty we provide a high quality property management service to all our clients in Tauranga, Mt Maunganui and Papamoa. We aim to obtain the maximum returns for your investment. We also have the latest market leading software systems that deliver up to the minute reporting.
In fact we are so confident with our service that we offer a three month money back guarantee if client’s are not completely happy!
So if you are thinking of getting on the investment property ladder, call Chris for a confidential chat about your needs and goals. Whether you are based in Tauranga or outside the Bay of Plenty she can provide you with local real estate knowledge and the latest rental market insights, as well as discuss Connect Realty’s property management services. Visit our website for more www.connectrealty.co.nz.
Given the on-going high demand for rental housing in Tauranga, Mt Maunganui and Papamoa, we think the better prepared you are for property manager appointments and applications the more likely your success in finding a home.
So the team at Connect Realty have put together this list of things you can do to help you be better prepared for the application process, property viewing appointment, and for when you accept your rental home tenancy agreement.
1. Where Do You Want To Live and What Type of Home Do You Need?
First things you need to consider and to write down:
- What type of home you are looking for as a rental property e.g. family home, small apartment, unit, large grounds etc
- The location/suburbs you are happy to rent a house in and, if you have one, a list of suburbs or streets that do not fit your criteria. To make this list consider commute times, shopping areas, public transport etc.
- If relevant, note any school zone you prefer to live within.
- How many rooms you need, and any extra requirements such as off street parking, boat storage, storage shed etc.
2. How Much Do you Want To Spend on Rent?
Once you have your criteria written down you then need to consider your rental budget. At Connect Realty we have a range of properties within all budgets, from waterfront Apartments to smaller town units. If you let us know your budget we will show only relevant properties to you.
If you are unsure of budget, a general rule of thumb is to spend no more than a third of your income on rent.
Rents can sometimes rise during a tenancy, however your rent cannot be increased for 180 days from the start of the tenancy and a landlord is required to give 60 days’ notice of the increase.
3. Do You Have Pets and/or Do You Smoke?
For some landlords Pets and/or smoking are not acceptable in the rental property. If you have pets you need to be honest about what they are and how many. We will only show you those properties that accept pets.
Likewise for smoking, please be honest in your application. Most properties will not allow smoking in the home, if you do smoke you will be required to do this outside.
Make sure you have references from previous landlords or suitable referees for us to call. We require names, phone numbers and written references. Family members are not accepted referees.
5. View Our Website ‘Properties For Rent’
Now that you have your criteria listed, we encourage you to look carefully through our website ‘Properties For Rent’ page to see if there is a property that suits your needs. If you see a property you are interested in viewing please phone us for the address so that you can drive by the property and see if it suits you.
Due to the current high demand for rental properties there may not be a suitable property listed on our website. In that situation please call us anyway to give us your details and criteria , so if a suitable property comes up we can phone you.
6. View A Property
If there is a property you are interested in we can organise a viewing for you. First we require you to fill out an application form, available on our website or at this link – Tenancy Application Form.
Once we have your application we will call to arrange a suitable time to meet. If a property is occupied this may take a few days to organise.
7. Renting A Property
If you would like to rent the property, and your application is successful, we will require you to pay a deposit immediately . Payment before you can start your tenancy usually includes:
- 4 weeks bond – this is returned to you at the end of the tenancy, unless a landlord makes claims against damages, arrears or cleaning etc.
- 1 weeks rent
- 1 weeks rent +GST as a letting fee
We will also require you to sign the tenancy documents.
Ongoing rent must be paid in advance. Don’t forget it usually takes the banks 24 hours to process payments, so you need to make your payment one business day before it is due.
8. Your Tenancy
Once you have moved into your property all tenancy issues can be sorted through us. For example, if something needs repairing then we will organise a contractor to come and fix it.
As part of our Property Manager role we will also inspect the property about every 3-4 months. We will give you at least 2 days’ notice of any inspection and our inspections are usually on a week day during working hours. You do not have to be present for our inspections.
If you require any more advice about renting a property in the Tauranga, Mt Maunganui and Papamoa area then don’t hesitate to call us at Connect Realty Property Managers. We have many years’ experience in real estate and extensive local knowledge for these areas.
Since our last blog, two more articles have featured in the Bay of Plenty times regarding the current property market trends in the Western Bay of Plenty. As discussed in previous blogs, the current rental shortage is pushing up rental prices in many areas of Tauranga resulting in fantastic returns for landlords, and the current shortage of housing is also resulting in a capital gains increase for the area.
In the article “Top returns on rental homes in city suburbs” they highlighted the great returns landlords are getting for properties in the Hairini, Welcome Bay and Greerton areas of Tauranga. These areas are all popular with families and those needing easy access to main commuting routes. In some of these areas rents have increased nearly 10% because of the rental shortage.
The Westpac Property Investor Report (September 2014) quoted in the article names Tauranga’s top 5 suburbs for gross yield returns as shown in this table:
|Suburb||Property type||Median Weekly Rent||Estimated Valuation (2014)||Gross Yield|
|Hairini||House (3 Beds)||$350||$264,000||6.9%|
|Tauranga||Apt/Flat (2 Beds)||$272||$246,000||5.8%|
|Greerton||House (3 Beds)||$330||$310,000||5.5%|
|Mount Maunganui||Apt/Flat (2 Beds)||$331||$311,000||5.5%|
|Welcome Bay||House (3 Beds)||$350||$332,000||5.5%|
The article also discussed the capital gains property owners are seeing for many of these areas. The same Westpac report outlines these top 5 suburbs for capital gains returns:
|Suburb||Property type||Median Weekly Rent||Estimated Valuation (2014)||Capital Gain|
|Bethlehem||Apt/Flat (3 Beds)||$315||$335,000||5.3%|
|Greerton||Apt/Flat (2 Beds)||$272||$300,000||4.6%|
|Otumoetai||Apt/Flat (2 Beds)||$275||$286,000||3.7%|
|Mount Maunganui||House (3 Beds)||$375||$455,000||3.6%|
|Mount Maunganui||Apt/Flat (2 Beds)||$331||$311,000||3.6%|
The second article Value of Bay properties up in ‘cheaper’ areas focused on the latest QV data which also shows that the average value of properties in Tauranga and the Western Bay has increased in the past 12 months, with some increasing in value by more than 5 per cent.
This article showed Pukehina had the highest increase at 9.3 per cent, followed by Matua, 6.9 per cent, Te Puke, 6.8 per cent, Mount Maunganui, 5.7 per cent, and Greerton 4.3 per cent.
Overall Tauranga was one of the best performers in the latest QV data, with values up 0.8 per cent in the past three months and 5.1 per cent year on year. As previously discussed, many people form Auckland are taking advantage of the cheaper property prices and better lifestyle in Tauranga and the Bay, driving up demand for all types of housing in these areas.
So now is a fantastic time to invest in a Tauranga rental property. With great returns and a capital gain combined with the services offered by Connect Realty Property Managers, you can enjoy a stress free investment.
If you wish to discuss any of the figures outlined in this blog, or the quoted articles, please call Chris in our office. She would be happy to talk about possible rental returns for your investment property, real estate trends in the Bay and more.
Chris Jenkins, from Connect Realty, features in this Bay of Plenty Times article that came out today. We have been fielding many property management & investment inquiries from Auckland & Wellington buyers who were seeking rent appraisals and advice on where to buy in the Tauranga area.
At present the demand for rental properties in the Bay of Plenty, especially the Tauranga area, is far outstripping supply. We encourage any property owner who is considering renting out their property, be it a second house or bach, to give us a call to discuss our services. We have many years expertise in real estate, and because we are a locally based company we keep up to date with all property news in the Tauranga area, including up-to-date property prices, rental returns etc. So give Chris or Nicky a call on 0800 333 221. Here is the Bay of Plenty Times Article:
Papamoa properties pull Aucklanders
Aucklanders are cashing in on rising house prices by using equity in their homes to buy investment properties in Papamoa.
Golden Sands sales and marketing manager Mark Day said Aucklanders who had capital equity in their homes were making five-year plans and taking advantage of the shortage of Bay rental properties.
A four-bedroom home in the Papamoa subdivision was let for $540 per week and bought for about $440,000, while others fetched $485-$510 a week.
“Investors are gaining confidence and it’s safe to say this is a sound place to invest … you are going to get a good return and stable tenants.
“There are jobs being created in Tauranga and employment opportunities are growing as more businesses relocate.”
Rentals accounted for about 3 per cent of sales but Mr Day expected that to rise as people got their “head around” equity they already had.
Ray White Realty Focus Mount Maunganui and Papamoa franchise owner Greg Purcell said that for the “first time in a long time you are getting equity gain”, not just yield.
“People were probably just looking at returns but now prices have popped up in Papamoa and there is no question about that.”
Aucklanders knew equity was on the move and wanted to get a foot on the property ladder in the Bay, he said.
Tauranga Harcourts general manager Nigel Martin said Auckland investors saw potential in Tauranga.
“Our prices haven’t moved up in a while and they’re looking at this market thinking it may be in for a price rise soon.”
As well as investors, retirees, young families moving for new jobs and people buying holiday homes were among those making inquiries, he said.
“We’re finding people come down for the weekend, look at three or four homes and make good, quick decisions.”
Realty Services chief executive Ross Stanway said many Aucklanders were moving for the lifestyle and lower house prices.
“The amount they’re getting for their Auckland property means they can cash in up there, move down here and buy a better house for less, and often being left with a little left over.”
Tauranga Property Investors Association secretary Lindsay Richards said there would be an increase in house demand and pricing in the next two years. Investors had learned from past boom-and-bust consequences but were becoming confident. “There are a few people being cautious but we have been in a slump for so long that things have got to pick up.”
Tauranga Rentals owner Dan Lusby said potential Auckland retirees were buying early in Papamoa.
“There are a lot of newer homes in Papamoa, they have equity in their homes in Auckland and the rent pays for it down here.”
Tenants also preferred newer homes and would pay a premium, he said.
Connect Realty Property manager owner Chris Jenkins said they had dealt with out-of-town landlords, including people from Auckland and Wellington who had bought new properties in Papamoa. In the past three months, she had fielded more inquiries from out-of-towners seeking renting appraisals or advice on where to buy.
Four new properties had been let.
“There is a real positive vibe happening and I think the more investors we can attract to buy rentals, the better.”
Rental demand was outstripping supply, she said.
The official start of Summer is only a couple of weeks away and once again the Bay is ready for a summer full of events and visitors. October saw the arrival of the first cruise ship, and these will continue to grace our shores until the end of March. This means lots more tourists shopping at the Mount and exploring our amazing Region.
As we have spoken about in previous blogs, rental properties are still in short supply in the Bay area (this includes rental properties in Tauranga, Mount Maunganui and Papamoa areas). We have many fantastic tenants waiting for their ideal home, this includes houses, units and apartments both furnished and unfurnished.
So now is a great time to invest in property in the Bay, and a great time to rent out that bach or second home that doesn’t get used as often as you would like. The returns on investment are excellent, and with our flat rate Property Management fee we can guarantee what your rental return will be. Furthermore, we have a strict selection process for screening tenants and we have regular comprehensive property inspections using the latest property management software.
If you choose to use us as your Property Managers, we have a secure Landlord Access Portal that you can access anytime from anywhere. This portal will provide you with tenancy information, from income and expenditure reports to tenancy details, at any time.
Our expertise includes over 20 years real estate knowledge for the Bay area. We are a privately owned and operated business and we pride ourselves on our fantastic and friendly service.
So, if you have a property you would like to rent, or if you are considering investing in a property in the Bay area, give us a call today. We can walk you through the steps of what you need to do, including any legal requirements, discuss rental returns, and set you up with the perfect tenants as soon as you’re ready!
Chris Jenkins – 027 443 6152
Or Freephone 0800 333 221
We recently shared an article from the Bay of Plenty times about the rental shortage problem in Tauranga and the surrounding areas. Within the print edition of this article was a story about our wonderful new client Madison Lesa.
Madison and her partner had been searching for a house to rent for 5 months, with no luck. Madison saw and liked a property we had advertised for rent, so she filled out one of our application forms and phoned our office. Property Manager Nicky Ryan met Madison at the property and was very impressed with how she presented herself, and knew she would make a great tenant for our property.
This is Madison’s story as told by the Bay of Plenty Times:
After five months of hunting Madison Lesa and her boyfriend have finally found a house to rent.
The 21-year-old, who is studying primary teaching full-time, struggled to find a rental property for her, her boyfriend and another couple.
“My boyfriend and I are both 21 so we get stereotyped as a partier or a house trasher,” she said.
Competition for properties was fierce and it was not uncommon for listing on TradeMe to have been viewed hundreds or even thousands of times, she said.
Miss Lesa was thrilled to have been given an opportunity and was excited to be moving into the central city house on Friday.
Her advice to others was to “sell yourself”.
“It’s like going into a job interview. Instead of going through the internet all the time it’s good to go into a real estate agent and say ‘hi’.”
Nicky and the team are thrilled that they were able to find a rental property to suit Madison.
If you, or anyone you know, are looking for a place to rent OR if you have an investment property you wish to rent out – Contact Connect Realty today. Our friendly and helpful team will be happy to help 0800 333 221.