I’ve just done a rental appraisal and it got me thinking…….

What information should you expect in your Rental Appraisal?

What you expect depends very much on what you want. There are 2 types of rental appraisals, online or in person. Online is good if you just want an indication of market rent in comparison with current listings.

In-person is always best as you can also meet the person who is possibly going to manage the property, they can cast their property management eye over the property and let you know if there is anything else you need to do to get the property ready for the market.  At this point, you could also ask for a copy of the Management Agreement so you can read the fine print and get advice if you are going to have it managed. (If you are going to be out of the country for 21 consecutive days, you must appoint a New Zealand-based agent).

A rental appraisal should contain the Property address, date it was done, a description of the property, comparison properties, bonds lodged recently and any recommendations, and of course who did it.

If the rental appraisal doesn’t come back with a price you would expect, question the property manager’s reasoning. Market rent does fluctuate according to demand and is seasonal, (not as many people move in the winter). The Property Manager will indicate the price; however, you never truly know what price you will get till you put it online, but we can try and be as accurate as possible.

If it is too high no one will want to look at it and too low, every man and his dog will be there!

There is a lot to consider when you rent out your home, it’s one of your biggest assets and who you trust with it needs to be carefully considered.

Why do you need a Rental Appraisal?

We conduct Rental Appraisals, so you know what the property is likely to rent for. This is to ensure you are charging market rent as you don’t want to underprice it and be flooded with people to rent it but left topping up your rent account. You also don’t want to overprice it as it will mean too much time on the market and that will eat into the funds before you even have tenants. Market rent is charging the right amount for the size and type of house and location.

There are various situations when you need to get a rental appraisal. You could be selling your house and moving to a new house but want to keep the old one as a rental. You could be just wanting to provide the report to a purchaser who needs it for bank purposes.

How do we come up with a Market Rent price?

Coming up with the market rent price is both mathematical and experience. We consider properties that are currently on the market for rent and how long they have been there. We look at what sort of property they are and how do they compare to your property.

We do have a system that allows us to see what has been rented up to 3, 6, or 12 months ago and we would look back at comparisons firstly in the last 3 months, then expand if not much to compare. The property must be in a similar area, be of a similar size and while you can’t expect to find anything the same it should compare as closely as possible.  We can see how long it took to rent which indicates a couple of things: was it overpriced? Or is the property a bit unique and niche?  We would have a look at what we already have in the same area and finally we look at Tenancy Services to see what bonds have been lodged for the area for the different bedroom numbers. See Example:

You can also get this off Tenancy Services website, however it does not drill down right into the suburb as the above one does.

 So, if you are thinking of buying, selling or renting your home, or turning your Air BnB into a rental property give Berrymans a call or request an appraisal on our website and we will be happy to answer all of your burning questions.