New Zealanders turning to residential property as a perceived fast track to wealth may be exposing themselves to avoidable risks by taking a relatively hands-off approach to their obligations as landlords, according to research commissioned by AMI.
The findings point to a sizeable cohort of do-it-yourself landlords who manage their own rentals and tenant relationships, often with limited formality around inspections, documentation, and ongoing oversight. In the survey, 15% of tenants said their rental properties do not receive regular inspections. More than half of renters reported that they communicate directly with their landlord rather than through a property manager, and 27% described their landlord as someone with whom they have an existing personal relationship.
AMI noted that New Zealand rental property owners can either manage properties themselves or engage a property management firm. Just under half of all rental properties are owned and managed by non-professional landlords, with most of that group holding only one investment property. Many of these arrangements involve renting to family members or friends.
Stephannie Ferris (pictured), AMI executive general manager claims, said that familiarity between parties does not remove the need for structure. “With interest rates dropping, and the market becoming more affordable, we know more aspiring property investors are considering purchasing a rental home. We want to make sure they are taking the right steps to protect their property and interests,” Ferris said.
She added: “While it’s popular to rent to people you know well, it’s essential that property owners are still taking proper precautions to protect those assets. This includes making sure they do appropriate checks before the tenant moves in and that they get into the habit of making regular, recorded inspections. This is particularly important to ensure any insurance claims you need to make on your insurance go as smoothly as possible.”
In light of the continued prevalence of self-managed and part-time landlords, AMI has highlighted specialist landlord insurance as one way to address financial exposure arising from damage and rent interruption. “Specialist landlord insurance policies are specifically designed to help property investors manage common risks associated with tenanted properties. These policies typically include cover for the repair or replacement of damaged or stolen chattels and furnishings, lost or defaulted rent, and the clean-up of abandoned possessions. They can also significantly reduce the financial impact of unplanned downtime between tenancies while repairs are carried out,” Ferris said.
AMI figures show that claims including loss-of-rent cover have risen by one third over the past five years. On average, loss-of-rent claims are more than eight times the average weekly rent in New Zealand, reflecting the time needed to repair damage and return a property to a condition where it can be re-let. “Most do-it-yourself landlords are unlikely to have the surplus cash needed to cover mortgage and other expenses if major repairs, such as those required after a fire, for example, are necessary. Getting smart about protecting assets ahead of time means landlords can do right by their tenants and be better prepared to protect property and their own wealth in the long-term,” Ferris said.
For insurers and intermediaries, the trend reinforces demand for loss-of-rent and landlord extensions and raises questions around sums insured, limits, and waiting periods in relation to realistic repair and vacancy durations.
AMI also points to operational risk controls as a key component of landlord risk management alongside insurance. The insurer recommends that owners adopt tenant screening, regular inspections, and maintenance as standard practice.
Suggested steps include verifying official identification for prospective tenants, assessing credit and income details, obtaining references from previous landlords, and meeting tenants in person. AMI cites police guidance that landlords should be cautious if tenants prefer to pay rent in cash or offer above-market rent in exchange for fewer inspections, as such behaviour may be associated with illegal activity and may complicate disputes.
On the property side, AMI advises landlords to prepare rentals for severe weather by clearing gutters, downpipes, and drains and by checking that roof areas, windows, and doors are secure. Regular checks of pipes and flexi-hoses for damage, and monitoring for leaks and mould, are also recommended. The insurer further advises scheduling servicing of heating and cooling systems and other major appliances, and carrying out annual smoke alarm inspections.
Administrative practices include taking rent in advance or lodging a bond with Tenancy Services within the first three weeks of the tenancy, inspecting properties inside and out at least every three months and between tenancies, and keeping written and photographic records of damage to distinguish wear and tear from insurable loss. AMI advises landlords to track rent payments closely, follow up in writing and in person if rent is 14 days overdue, and apply to the Tenancy Tribunal for vacant possession where necessary. Landlords who find it difficult to meet these obligations may choose to engage a professional property manager to handle day-to-day administration and compliance.
While AMI’s research focuses on landlords, 2024 figures from State Insurance indicate a parallel pattern on the renter side, particularly among younger customers with high concentrations of value in portable electronic devices.
State reports that electronics account for 63% of contents claims among young renters, with theft driving many of the highest-value claims. For State customers under 25, some claims for stolen items have exceeded $20,000, particularly in burglary and theft cases. The insurer has recorded incidents in which tenants lose entire bags of technology – including laptops, handbags, and phones – which are easily carried and stolen. A substantial number of claims involve items taken from vehicles parked at locations such as gyms and university car parks.
