Thinking about becoming a Landlord and renting your home?

Renting out your home in New Zealand can be a great way to generate extra income, but it comes with responsibilities and risks. Whether you’re considering becoming a landlord for the first time or looking to optimize your rental process, this guide covers some of the key aspects you need to know.

1. Consult the experts 

• Refer to Tenancy Services for the latest landlord specific advice such as healthy homes and legal requirements
• Join your local property investor association – New Zealand Property Investors Association have various branches throughout New Zealand.
• Consider the benefits of engaging a professional property manager.  
• Companies such as myRent provide valuable resources in terms of finding tenants and managing your properties

2. Understanding your responsibilities as a Landlord

As a landlord i​​n New Zealand, you have legal obligations under the Residential Tenancies Act such as:

• Ensuring the property is healthy and safe (meeting Healthy Homes Standards)
• Providing and maintaining the property in a reasonable condition
• Lodging the bond with Tenancy Services
• Conducting rent reviews and providing proper notice for increases
• Keeping proper records of agreements, payments, and inspections

3. Deciding on long-term vs. short-term rentals

You need to determine whether to rent your property on a long-term basis or as a short-term holiday rental (e.g., through Airbnb).

• Long-term rentals provide steady income and more security but require ongoing property management.
• Short-term rentals can yield higher returns in peak seasons but involve more effort, cleaning, and compliance with local council rules.  They also require commercial insurance which can be more costly.

4. Setting the right rent price

Research similar properties in your area to set a competitive rental price. Consider:

• Location and amenities
• Property size and condition
• Market demand
• Seasonal fluctuations

Websites like Trade Me Property and Tenancy Services can help you gauge market rents in your area.

5. Finding and screening tenants

To attract good tenants:

• Try advertising on Trade Me Property, Facebook Marketplace, and local community boards or use a Property Manager.
• Conduct thorough tenant checks, including credit history, previous landlord references, and employment verification.
• Use the resources provided by Tenancy Services  or companies such as myRent to ensure all legal terms are covered.

5. Understanding insurance needs

Landlord insurance is essential to protect your property from risks like tenant damage, loss of rent, and liability claims. Standard home insurance will not cover rental-related risks, so consider a comprehensive landlord insurance policy from specialist providers like Initio.  Take note of your policy conditions such as specific Landlord obligations around property inspections and tenant checking.

6. Property maintenance and inspections

Regular maintenance keeps your rental property in good condition and prevents costly repairs. You should:

• Conduct routine inspections,  Tenancy Services have templates that guide you through what to check.  myRent also have great resources in that regard.
• Respond promptly to repair requests
• Budget for ongoing maintenance costs
• Have a system in place or with a provider such as myRent which allows you to track rent payments 

7. Managing tenancy agreements and ending a tenancy

Ensure tenants sign a legally binding Residential Tenancy Agreement outlining rent, bond, and house rules. When ending a tenancy, follow proper legal processes, including giving the correct notice periods and handling bond refunds properly.

8. Understanding tax implications

Rental income is taxable in New Zealand. You may also be able to claim expenses such as:

• Property management fees
• Mortgage interest (if applicable)
• Repairs and maintenance
• Insurance and rates

Check with an accountant or Inland Revenue (IRD) for guidance on tax obligations.

Final thoughts

Renting out your home can be a rewarding financial decision, but it requires careful planning and management. By understanding your responsibilities, pricing your rental appropriately, and securing the right insurance, you can ensure a smooth and profitable experience as a landlord.

If you’re considering renting your property, take the time to research and seek professional advice where needed to avoid common pitfalls.

Articles of interest:

• What are my obligations as a landlord?
• Property Management considerations
• Landlord insurance fundamentals
• Guide to landlord insurance
• What is landlord insurance?