Is This The End Of The DIY Landlord?

For a long time in New Zealand, it was generally expected that if you bought a rental property, you could also manage its tenancy. This was our normal, and we chalked it up to being unafraid of a bit of extra work and weekend DIY. Buy a second house. Find some tenants. Collect the rent. Call a plumber if something breaks.

Except managing somebody else’s home was never really DIY. People with no training could suddenly become responsible for selecting tenants, understanding tenancy law, assessing property health, conducting inspections, handling disputes and managing what is, for another family, their home. For decades, we treated all of that as an incidental part of owning the asset.

That is beginning to look increasingly outdated. Around 60% of New Zealand rental property owners still manage their properties themselves or with family, although that proportion has been declining. At the same time, the job has become substantially more complex. Landlords now operate within a framework of Healthy Homes, and a raft of other legislation which sets high standards around notice requirements, record keeping, maintenance obligations and enforcement. Tenants, quite reasonably, now expect a professional standard from the people providing the homes they pay significant amounts to live in.

The Government appears to agree. It recently signalled its intention to regulate residential property managers, introducing registration, minimum education or experience requirements, conduct and training standards, and a formal complaints and disciplinary process. On the face of it, that makes sense. Managing rental housing carries significant responsibilities and the people paid to do it should be competent and accountable.

But there is a curious wrinkle: private landlords managing their own properties will be exempt from the new professional requirements, suggesting they are sufficiently regulated simply under the Residential Tenancies Act.

At first glance, this might make managing your own property look like the simpler option, going forward. It isn’t. The exemption doesn’t remove a landlord’s existing legal responsibilities. A self-managing owner still needs to understand and comply with tenancy

law, Healthy Homes requirements, inspections, notices, record keeping, maintenance and the host of other obligations that come with providing somebody’s home. The difference is that they will be personally responsible for getting those things right.

In fact, that is what makes the distinction so interesting. We could end up with a system where a professional managing 100 homes must demonstrate minimum competency, while someone who buys their first rental property on Friday can start managing that same rental on Monday without demonstrating any competency at all.

That shouldn’t be mistaken for self-management becoming easier. If anything, the direction of travel is clear: rental housing is becoming more complex, more accountable and more professional. The question is whether our expectations of everyone managing it are keeping pace.

This isn’t an argument that every landlord should be forced to employ a property manager – I know plenty of experienced private landlords who manage their properties extremely well. But perhaps we should separate two ideas we’ve historically bundled together: owning a rental property and being qualified to manage one. They aren’t the same thing.

For investors, there is also a practical question worth asking. As the regulatory environment becomes more sophisticated, is personally keeping abreast of every obligation really the best use of their time, or the best way to protect a significant asset?

If we believe managing rental housing carries enough responsibility to require professional property managers to meet minimum standards, it’s reasonable to ask why some basic standard of competency shouldn’t apply to everyone doing the job. The same tenant is involved. The same legislation applies. And the consequences of getting it wrong don’t change according to who owns the house.

The DIY landlord won’t disappear tomorrow. But the assumption that buying an investment property automatically qualifies you to manage somebody else’s home may finally be on its way out.