How to avoid tenant nightmares

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Nightmare stories about tenants trashing rental properties and refusing to pay rent are all too common. In the last couple of weeks alone, several tales have gained traction in public consciousness.

One involved a family who had not paid any rent for over 12 months, while deftly avoiding eviction and termination notices. Another involved a Toowoomba landlord who was left with an estimated $30,000 cleaning bill after being forced to get the police to evict his tenants.

Such situations are something every investor fears. And, sometimes, it can seem that the tenancy scales are heavily stacked against them.
 
For example, under SA’s recently amended Residential Tenancies Act, which came into force on March 1, there are significant requirements for landlords and property managers in relation to residential tenancy databases (RTD).
 
REISA CEO Greg Troughton said that landlords and property managers now have to:
 
  • Notify prospective tenants if they check their application against an RTD.
  • Inform prospective tenants if an RTD has information about them and tell them how the listing can be amended or removed.
  • Not list information about a tenant on an RTD unless the tenant has been given a copy to review and has had 14 days to make a submission.
Further, a tenant can only be listed on an RTD if the tenancy has ended, the tenant breached the agreement, and either the tenant owes the landlord more than the bond, or the Tribunal has made an order terminating the tenancy agreement.

So what can investors do to try and ensure as few problems with their - potentially unknown - tenants as possible?
 
RentingSmart founder Ben Levi said the first, and most important, rule for any investor-landlord is to treat “landlording” like a business not a hobby.
 
In his view, for a “landlording” business to succeed it must follow strict guidelines, make sure all preventative measures are in place, have great record keeping, and maintain positive cash flow and strong customer (ie: tenant) relationships.
 
Along with being familiar with the Tenancy Act relevant to the state their property is in, landlords should ensure they have the right policies and procedures in place to deal with bad tenants before a lease is even signed, Levi said.
 
While landlords should be friendly, approachable and understanding to their tenants, he said they also have to make it clear - from day 1 - that they will monitor rent collection and conduct regular property inspections, in a legally mandated way.
 
“If your tenants know that you will be aware of rent in arrears, and know your rights with reminder notices, ‘termination notices’ or ‘notices to vacate’, as well as entry notices, they are unlikely to push the boundaries.”
 
Ben Levi’s top tips for landlords:
1. Tenants must know that you treat property investment and ‘landlording’ like a business.
2. Prevention is better than cure.
3. Do everything by the book.
4. Make sure you provide the correct minimum days required for notices and entry.
5. Compile an “entry condition report”, which includes photos, of your property before tenants move in.
6. Keep comprehensive records of all your property inspections and your conversations with tenants.
7. Make sure you have landlords insurance.
 
 
 

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Comments
  • Me says on 18/03/2014 06:37:31 PM

    I have done all the checking and I have done everything you mention and still you can get screwed over. And even when you follow all the rules and do everything by the book and in abidance with the law, you get to VCAT, CTTT & QTAC et al and the sitting member wants to screw you as they think having a rental property is like having a spare house and not a business. The Admin Council members have no idea of how to run a business and believe that all landlords are rich fat cats that can afford for tenants not to pay rent and destroy properties.

    I have been treated so contradictory to the members code of conduct, that I have had cases reheard due to members not adhering to conduct and procedure rules. But each and every sitting member has no idea of how to run a business let alone a rental / investment property one.

    Landlords need laws that allow us to quicker evict tenants who do not pay and a justice system that sticks to the laws and does not penalise landlords because sitting members do not like landlords en masse due to a perceived bias and prejudice.

    And don't get me started on the police. They are supposed to evict tenants but instead they give them notice, and in those notice days the tenants causes thousands of dollars of damage to the property because they are ticked off that they are being evicted and there is no way they can pay for it. Yet police policy, practice and procedure dictates that the police goes with the locksmith and evicts the tenant - that's it! No Notice! And when this is brought up at tribunal the sitting member tells you to shutup and he doesn't want to hear from the landlord.

    Landlords need a stronger voice in the Residential Tenancies Act and we need support at tribunal. Each state has a Tenants Union that services tenants at no cost. In fact it is funded by the interest the state govt earns from rental bonds. But landlords have nothing unless we pay for legal representative. Oh yeh agents are supposed to do it, but have you ever been there and heard one of these sittings? They are a joke! There is no justice! Just a single person lording over the place handing down judgements and only hearing what he wants. Blah! BlaH! BLAH!

    Tenants abuse properties and landlords because they can. The Tribunal allows it and even when you have an order you then have to go to the Magistrates Court and then you have to know where they have moved to and then get the Sherriff to recover any goods to sell if they have any. It is not easy and as previously mentioned, there is not assistance to the landlord unless you pay for it. But the tenant gets it all for nothing!

    Landlords are at a huge disadvantage and the system does this because it somehow perceives the tenant as needing more help than the landlord because they don't own a property.

    Sometimes I think we should just sell up everything we own and buy a property somewhere in the hills with no mortgage, and go on the dole, get our health care card with all its lurks and perks, and leave the real estate business to the suckers!

  • Pascoe says on 18/03/2014 11:04:00 PM

    Me...........Well said.

  • fufi says on 19/03/2014 01:11:49 PM

    Me, you have hit the nail on the head - I couldn't have said it any better myself. We could all jump on the sinking ship and certainly have a less stressful life, pay no land tax, and then the government can worry about providing much needed accommodation!

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