Summer is an active time for the rental market and can make for a hard time for renters' wallets.
Finding a suitable place is a task in itself. But then once you do score the dream rental, there is financial pressures of coming up with thousands of dollars for a move-in costs.
Waikato Real Estate’s business development manager Ben Roberts it can be tough to come up with that money.
"Sometimes mum and dad can give a hand, in some cases WINZ can also help,” he says.
Start your property search
A rent for a three-bedroom house in Hamilton cost around $500 with some neighbourhoods reaching up to $650 a week, Roberts says.
With the average weekly rent in Auckland estimated to hit $600 by the end of the year according to Barfoot & Thompson’s recent figures, renters are increasingly hard pressed to meet growing move-in costs.
To secure a property, tenants have to fork out the four weeks of rent as a bond, plus one week's rent in advance with a portion of that bond paid as a deposit to secure the property once you have got the tenancy. In some flats. According sorted.org.nz some property managers can ask two weeks’ rent in advance and a non-refundable letting fee equivalent to one week’s rent plus GST.
Roberts says the whole five weeks' amount doesn't have to be paid at once, but does need to be completely paid up by the day renters pick up the house key.
If the property is vacant, that means that new tenants might have as little as a week to come up with the bond and first weeks' rent money.
That bond is deposited to Department of Building and Housing within 23 working days, where it’s kept safe until you leave that flat. The Tenancy Services website has more information about bonds and how they work.
Financial adviser and EnableMe boss Hannah McQueen says it’s tricky to come up with money for bond and many renters are making the same mistake.
“They don’t think about coming up with the money until a week before they need to come up with the money,” she says.
Those moving out of family home for the first time are generally very surprised thousands of dollars are involved in setting up a flat.
There’s no hack or an easy way to do it, McQueen says.
Putting aside a minimum half of your income when you are living with parents would be an effective way of starting the saving, she says.
A rigorous scheme of saving might shake up the system at the start, but will pay off, she says. McQueen and other financial coaches can help first time renters come up with a savings plan, or sorted.org.nz for getting ahead financially, has helpful advice and budgeting tools.
“It might be that someone is saving for six months to come up with $2000 or maybe [they reach that goal] sooner, it could be as little as a month. We need to be able to design a plan so that you can move forward with confidence.”
McQueen suggests savers set up an automatic payment to a savings account and if you don’t trust yourself with touching those savings, give an eftpos card to your parent or someone who can control it for you.
Create an annual plan for spending, which should include car services, phone bill payments, electricity bills, and unexpected situation.
“You will always have doctor's visit or an odd curve ball - your car will need to be fixed or something – you need to start to map out for those things and you are saving the difference,” McQueen says.
Victoria University has a handy 2020 student financial survival guide that even shows sample budgets to help estimate the costs involved with flatting.
