Moving on from the family home can be a big step, but it opens the door to the next chapter. Forever Homes shines a light on the options for retirement in style.
We’ve grown up thinking that renting is something we do when we’re young, before and after the OE, or in the first few years of working. After that, we buy our own place.
This is 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.
Renting for longer is something many New Zealanders are doing – and there is no shame in it. But maybe it’s time to do it better, to put more effort into finding the right landlord, and the right kind of lease.
Helen O’Sullivan, chief executive officer of Crockers Property, thinks the rental housing market is moving towards a more professional approach.
Part of this professionalisation is 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, especially Auckland (which has the highest proportion of renting households in the country), become higher-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.
Appealing for mature renters
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 at the company’s Hobsonville Point 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.
New Zealand’s population is growing, and ageing at a rapid rate.
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.
Renting is a ‘lifestyle choice’
Michelle McMahon was sick of pouring all of her money into her house in Glendene and never having any spare money. 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, the body corporate fees are covered by the landlord as is the insurance, and almost all of the maintenance.
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 house-sale money to supplement her lifestyle, still works part-time and, since moving, has been on two international trips, including one to England to attend the Chelsea Flower Show, a lifelong dream.
The tenant has wallpapered a wall in her living room, and she’s 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,” she stresses.
The appeal for investors, and for tenants
Mum and dad landlords can take a leaf out of the Build-to-Rent industry’s book, O’Sullivan believes.
The request of taking a longer lease, is something a lot of landlords would happily look at, for instance, she says. “Continuity of income is what they want. And they should be treating it as a business, ‘how can I serve?’.”
For renters, knowing they’ll be in one place for a while is very beneficial. “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,” says O’Sullivan.
Prospective tenants should also be alert to areas with rising vacancy rates, where deals might be done. For example, there are some good prices on CBD apartments at the moment, in the absence of international students, says O’Sullivan.
“The city is a great place to live,” she adds.