The changing face of tenancy
Michelle McMahon was sick of pouring all of her money into her house. She tells Gill South why she sold up.
Many New Zealanders grew up thinking renting was for youngsters – but that’s . no longer the reality. It takes, on average, 8.5 years to save for a deposit for a home, according to CoreLogic, and one-in-three Kiwi households (31.9 per cent) rent their home, says Stats NZ.
And how we rent is changing. Helen O’Sullivan, chief executive officer of Crockers Property, thinks the rental housing market is moving towards a more professional approach, for example the Build-to-Rent model. These are rental properties that have been built with the express intention of holding long-term and, with this in mind, these companies will often offer longer tenure leases – if required.
As our cities become more high-density, O’Sullivan believes this model will become more prevalent due to the capital investment needed for multi-unit blocks.
With the Build-to-Rent model, the home occupier is the customer. ‘‘They are at the centre of the model, and the property manager has the authority to fix things, they’ve got a budget. They know to keep the property in good shape – that’s how you keep good tenants,’’ says O’Sullivan.
Having a rental on a secure, long lease is something that is especially useful to those in their more mature years.
Brian Collins, director and head of Build-to-Rent specialist New Ground Living, which prefers tenants to take three to five-year leases, says up to 30 per cent of his tenants in Hobsonville Point’s terraced houses and apartments, are over 60.
Quite a few of those over 65 have owned property in the past, and are choosing to live in brand new, warm homes with security and community, he says.
‘‘One grandmother has signed up for a five-year plus lease, and we’ve committed to never increase the rent above inflation during the tenure,’’ says Collins.
New Ground is planning more terraced housing and apartments in Glen Innes, as well as in inner West Auckland, and on the North Shore. Meanwhile Collins is hoping more will join the growing Build-to-Rent industry.
If you’re trying to stay independent as you age, renting in a secure situation can have some real advantages.
The Build-to-Rent model is good for two of the biggest issues identified by occupiers – getting maintenance done and security of tenure – says Crockers.
Michelle McMahon was sick of pouring her money into her house in Glendene so she sold up and took a seven-year lease on a terraced home with New Ground Living in February 2019.
‘‘It was a lifestyle choice,’’ she says. ‘‘I’d just been made redundant and wanted to start enjoying my life, but wasn’t able to do that. I lived in overdraft, I couldn’t go on holiday or to a show. Everything I had went into the house, the rates and insurance, for instance.’’
At her Hobsonville Point home, body corporate fees, insurance and almost all maintenance are covered by the landlord. If people want to customise their homes they can, within reason, and half of the tenants have pets. McMahon, who has a dog, says this was her biggest concern.
‘‘I think I’ll definitely keep living longer independently,’’ the late-sexagenarian says. ‘‘I don’t have to worry about maintenance, I just need to ring and say, ‘this needs doing’.’’
McMahon has used her housesale money to supplement her lifestyle, still works part-time and, since moving, has been on two international trips, including fulfilling a lifelong dream of going to the UK’s Chelsea Flower Show.
She has wallpapered a wall in her living room, and created her own garden. ‘‘I love my garden – and it makes it feel like I’m at home. I don’t think of it as a rental, it’s my home.’’
Mum and dad landlords can take a leaf out of the Build-toRent industry’s book, O’Sullivan believes – especially longer leases. ‘‘Continuity of income is what they want. And they should be treating it as a business [as in] ‘how can I serve?’.‘‘When people know they’ll be at a home for a period, they can put down roots and be connected – there are so many downstream benefits.’’