What would this rent for

Posted on Thursday, March 27 2014

WHAT WILL THIS PROPERTY RENT FOR?

Gone are the days that owner occupied properties are at one end of the quality scale and rental properties are at the other. A standard property today would include a heat-pump or wood burner, good proportions, off street parking and a reasonable kitchen and bathroom.

Every additional feature in a rental property has a value to tenants and lacking one of the above reduces the value. Rents will increase with features such as:

Garage – still worth about $20 per week for a stand alone garage, increase that for internal access or double garage. A carport can be worth up to about $15 if a useful size.

Dual heating is a bonus and with heat-pumps becoming standard especially in the colder cities such as Dunedin, then finding properties with two or more heat-pumps or a burner and heat-pump is more and more common and can be worth between $10 and $20 more a week.

A reasonable kitchen is expected these days, however a new kitchen and bathroom can add about $20 per week to rent as can new quality carpets, paint and curtains which are neutral and matching throughout the property.

Stunning views can add around $10 per week although residents of hilly cities such as Dunedin and Wellington are used to views, great views are still sought after by those coming into the city.

Outstanding outdoor living especially if it flows from the open plan living can add a further $10 per week to the rent. An en-suite or second bathroom is also worth about $10 per week. Although bang for buck, one of the lesser value for money additions, the popularity of properties with second and third bathrooms is tremendous therefore minimising downtime. A second living room or formal dining adds another $10 in the better quality homes and often more in the cheaper ones as it would more likely be used as another bedroom.

Whiteware can add value at up to $10 each for washing machine, fridge freezer and dishwasher and less for a dryer or microwave. A sleep-out (without en-suite) is worth around $10 per week although the popularity in a colder place like Dunedin is minimal.

Double glazing is worth around $10 per week as well and a new build versus a renovated property with size and proportions comparable is worth around $20 more a week.

This is where it gets tricky as there is a natural ceiling to the amount of rent you can increase for additional features. As a rule of thumb add a maximum of three for an average property and eight for executive homes.

Therefore if an average three bedroom property in Dunedin is worth $260 per week, then you could add $115 for a second heat-pump ($20), en-suite ($10), double garage $25), outstanding outdoor living ($10), double glazing($10), new kitchen and bathroom ($20), new carpet, paint and curtains throughout ($20) making that $375 per week.

On the other hand if a property is missing something that is now considered standard then there are necessary deductions.

The following could lose $20 per week off the rent (limited to say three items) Not having any off street parking in an area which usually does, no heating, poor access or steep steps or path, dingy and uninsulated, dodgy neighbours or neighbourhood, quirky or poor layout or proportions, badly marked or worn carpets and paintwork or poor location for sun. Finally if the only toilet is an outdoor toilet then knock $40 off the rent.

Although this is just a guide, it can help to justify an expected rent or even look at what areas of a property could increase the rent or desirability.
For a more extensive guide of features and values to consider when looking at purchases or renovations please contact us via our website below. We are also available to do rental appraisals and again can be CONTACTED VIA OUR WEBSITE if you are interested in this service.

Tania & Kyle Elmer
Mana Property Management Ltd / www.ManaProperty.co.nz

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Expert's Bio

Tania & Kyle Elmer

Tania & Kyle Elmer are active investors with a large portfolio of properties in Dunedin and Central Otago and mentor investors in the techniques used to grow wealth through property investing. Kyle and Tania are Co-directors of the Leading Property Mangers of New Zealand (LPMNZ). Kyle is a past president of the Otago Property Investors Association (OPIA). They founded Mana Property Management Ltd to provide specialist management services to Discerning Landlords dealing in the quality end of the market. www.ManaProperty.co.nz | Find Kyle on Google+

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