Review Rent but Retain the Tenant

Rent reviews are a core part of running a successful investment property, and in today’s rental market, they require a smart, data‑driven approach. With rental supply rising and tenants more price conscious, landlords can still lift rents — but increases need to be aligned with market conditions and communicated well.

Current legislation allows rent increases once every 12 months with 60 days’ notice, and while there’s no cap, rents must remain within fair market value. Typical adjustments sit around 3–5%, but the real benchmark comes from comparable listings, rental data tools, property condition, and how easily your tenants could relocate.

Consistent, modest annual increases are more effective than infrequent large jumps, and timing matters. Tenants can cope better with a $20 increase annually than an $80 jump after a few years. Rent reviews work best at lease renewal,  after improvements, or during high‑demand seasons. They’re less effective part way through a fixed term, or immediately after maintenance issues. An increase is not advised if there are current unresolved maintenance issues.

Clear communication is essential. Giving tenants early notice, providing a simple rationale and avoiding emotional or defensive explanations helps maintain a positive relationship. In a softer market, retaining high‑quality tenants can be more valuable than pushing for maximum rent — especially when vacancy and turnover costs quickly add up.

Working on an average rent of $750 per week - If your tenant vacates you could be faced with a couple of week’s vacancy ($1500) , cleaning ($200), advertising and letting fees ($750), minor repairs / smoke alarm check ($250) which could add up to $2700. Negotiating a slightly lesser increase could mean more money in your pocket than stubbornly sticking to the $40 per week increase.

Landlords and tenants can agree to increases sooner than every 12 months when genuine improvements or beneficial changes are made, provided the new rent still reflects market value. If tenants question an increase, evidence‑based comparisons and calm discussion usually resolves concerns.

In today’s environment, successful rent reviews rely on professionalism, market awareness, and a balanced approach that protects both your asset and your tenant relationships. Strategic pricing, strong communication, and well‑maintained properties remain the keys to long‑term investment performance.

The Home and Co Essential Landlord Checklist

These are the three essential things landlords need to have in place to start a successful tenancy.

·       ONE: Healthy Homes
The Healthy Homes standard which became mandatory at the start of any tenancy on 1 July 2025, is the minimum standard a rental home must achieve. Not having a Healthy Home compliant property can result in fines up to $7,200 for each infraction, with other fines for not providing a Healthy Home statement or providing a misleading statement. This includes not keeping your home to the standard.

The five areas which comprise of Healthy Homes are;

Heating – how much heating is required to heat main living space?

Insulation – what insulation is found in the ceiling, walls and floor?

Draughts – is the home free of draughts?

Moisture – is the home free from moisture and how does it move water away from the home?

Ventilation – is there ventilation to the exterior of the home, where is it placed and what are the ventilation systems?

Home and Co uses a trusted third party who are thorough and professional to determine whether a home meets this standard.

·       TWO: Understand Your Insurance
All landlords should have insurance for their investment home. Reading and understanding what your insurer requires of you as the owner is very important. A few of the basic pieces of information your insurer will include in the policy wording;

-            How often are inspections needed?

-            What records are you required to keep?

-            What should you do if your tenant falls into arrears?

-            What are your excesses?

-            Is pet damage covered?

·       THREE: Maintenance & Cleanliness
Your home should have all maintenance completed prior to any tenants moving in. This can include preventative maintenance such as heat pumps and log burners being serviced, gutters being cleaned especially if going into or out of Winter.  Reviewing and checking smoke alarms at the start of every tenancy is mandatory, these require at least annual check-ups, while most smoke alarms advise regular testing and cleaning. Maintenance is on-going and landlords should be proactive at resolving any issues which may arise during a tenancy, it serves their tenants health and enjoyment of the home, as-well as protecting a landlord’s investment.

Setting the standard of cleanliness for your tenants is important, having your home professionally cleaned is a great way to ensure your tenants start their tenancy in the best possible state. It also signals how you would like the home returned at the end of the tenancy. Tenants are only expected to return a home reasonably clean.

As a landlord there are so many things to consider, having these 3 key areas covered will help ensure a successful start to a tenancy. Home and Co Property Management specialises in long-term property management in and around Wanaka.

Home & Co Property Management Wanaka
Nobody knows the Wanaka rental market better.

Your Rental Compliance Guide: Healthy Homes Standards Explained

Ensuring your rental property meets New Zealand’s Healthy Homes Standards by 2025 is essential to provide tenants with a warm, dry, and healthy living environment while avoiding penalties for noncompliance. Here’s a concise guide to help you get ready:

Key Requirements

Heating

Your rental must have a fixed heater capable of heating the main living area to at least 18°C. Energy-efficient options like heat pumps, wood burners, or flued gas heaters are ideal. Portable heaters won’t suffice. Tip: Upgrade to an energy-efficient heating system for better comfort and compliance.

Insulation

Ceiling and underfloor insulation must meet minimum R-values:

• Ceiling: R 2.9 (Zones 1 & 2) and R 3.3 (Zone 3).

• Underfloor: R 1.3 nationwide. Tip: If installed before 1 July 2016, check and update insulation as it may have settled or degraded.

Ventilation

Ensure windows can open in living areas and bedrooms, and install functioning extractor fans in kitchens and bathrooms to remove moisture. Tip: Test extractor fans regularly to ensure they meet standards and prevent mould.

Moisture and Drainage

Proper drainage systems (gutters, downpipes) and a ground moisture barrier for enclosed subfloors are required. Tip: Inspect drainage systems frequently to address issues early and avoid costly repairs.

Draught Stopping

Seal gaps and holes in windows, doors, floors, and walls to prevent cold draughts. Tip: Check for draughts on windy days and seal them for a cost-effective compliance solution.

Noncompliance Penalties

Landlords failing to meet the standards by 1 July 2025 could face fines of up to $7,200 per breach. Compliance ensures tenant health and avoids these hefty penalties.

Common Issues at the Tenancy Tribunal

Thousands of tenants and landlords turn to the Tenancy Tribunal each year to resolve disputes. In the September quarter alone, over 7,000 applications were lodged, with rent arrears, bond refunds, tenancy terminations, and compensation claims being the most frequent issues.

Rent Arrears Dominate Cases

Rent arrears accounted for 4,484 applications—more than 60% of all cases. Some disputes involve significant unpaid amounts; in one instance, a tenant was ordered to pay over $10,000 to avoid eviction.

Bond Refund Challenges

Nearly 3,000 applications were related to bond refunds. Disagreements often arise over property conditions or unpaid rent at the end of a tenancy.

Termination and Possession Disputes

More than 2,500 cases involved tenancy terminations or possession issues. For example, the Tribunal recently upheld a landlord’s possession rights after a tenant tried to retract their notice to vacate.

Compensation Claims

Compensation disputes are also common, with tenants seeking damages for issues like improper notices or retaliatory actions. In one case, a tenant received $2,000 in damages due to a landlord’s retaliation.

Tribunal Delays

Hearing delays remain a concern, with landlords and tenants often waiting 4-6 weeks or longer to schedule a Tribunal hearing.

Pet Consent Rules and Pet Bond: Upcoming Changes

New provisions regarding pet consent and pet bonds are set to take effect on a date to be determined. These changes will impact tenants and landlords alike. Here is a summary of the key updates:

Key Changes to Pet Consent

• Tenants will be allowed to request written consent from their landlord to keep a pet in their rental property.

• Landlords can refuse such requests only on reasonable grounds.

• Tenants will be responsible for any pet-related damage that goes beyond fair wear and tear.

Disability Assist Dogs: These are excluded from the pet consent and pet bond rules. No permission is needed, and landlords cannot charge a pet bond for these dogs.

Pet Bond Guidelines

• Landlords may require a pet bond, which can be no more than two weeks' rent, in addition to the general bond.

• If a landlord consents to pets, a pet bond may be a reasonable condition.

• Tenancy agreements must specify the type of bond (general or pet) and the amounts required.

• Pet bonds must be refunded if the pet passes away. If the tenant gets a new pet, a new pet bond may be charged.

• Rent increases affect pet bonds. For instance, if rent rises by $10 per week, the pet bond may need to be topped up by $20 (equal to two weeks’ rent increase).

Existing Tenancy Agreements

• These changes apply only to tenancies that begin after the provisions take effect.

• Pets already in rental properties before the provisions take effect are not impacted, provided the pet was agreed to by the landlord or not prohibited in the tenancy agreement.

Additional Information

• The Tribunal can order the use of either bond (general or pet) to cover costs if pet-related damage exceeds the bond amount.

• Further guidance will be provided closer to the commencement date to help landlords and tenants understand their rights and responsibilities.

Preparing for the Changes

Whether you’re a landlord or tenant, it’s important to stay informed and update your agreements accordingly once the pet provisions are in effect. If you have questions or need assistance with these new rules, feel free to contact our team for expert advice.

Understanding the Tenancy Act Changes 2025

On 30 January 2025, changes to the Tenancy Act will come into effect, impacting landlords and tenants. These amendments aim to clarify tenancy terminations and fixed-term agreements. Here's a summary of the key updates.

Key Changes to Tenancy Terminations

Periodic Tenancies From 30 January 2025, landlords can terminate a periodic tenancy with “no cause” by giving 90 days’ notice. They can also provide 42 days’ notice if:

• The owner or a family member requires the property as their principal residence for at least 90 days.

• The property is sold with vacant possession.

• The property is needed for the landlord’s employees or contractors as stated in the tenancy agreement.

Tenants can end a periodic tenancy with 21 days’ notice.

Important Notes:

• Notices issued before 30 January 2025 remain valid.

• Retaliatory notices may be set aside, with up to 12 months for tenants to seek damages.

Fixed-Term Tenancies

Fixed-term tenancies will automatically transition to periodic tenancies unless:

• Either party gives notice to end the tenancy 90 to 21 days before its expiration.

• Both parties agree on a different arrangement.

For tenancies expiring on or before 30 April 2025, the current rules apply. For those expiring on or after 1 May 2025, the new rules will apply.

Key Dates to Remember

• 30 January 2025: New rules for periodic tenancies take effect.

• 1 May 2025: New rules for fixed-term tenancies come into effect.

How These Changes Impact You

For Landlords: These changes provide more flexibility but require compliance with updated notice periods to avoid penalties.

For Tenants: The rules strengthen tenant protections and simplify transitions between tenancy types.

Need Help Navigating These Changes?

Have questions? Our experienced team is here to help you navigate the new Tenancy Act and stay compliant. Contact us today!