Real life: Tenant turned my house into a brothel

By

25/11/2011


Brendan Kelly, property enthusiast and coach at RESULTS Mentoring Program, warns landlords not to be greedy. He cites a personal example of how one of his own self-managed investments came a cropper because he allowed the dollar signs to cloud his character judgment. 

“I had two on-the-spot applications at the open for inspection. One was from a couple who “presented very well”. They were looking for long-term accommodation, but couldn’t move in for a month and bartered the weekly rent down from $255 to $250. 

“The other option was a man who I admit with hindsight seemed a little “questionable in character”. But he was happy to pay the asking rent and was keen to get his possessions out of storage and move in the following week. 

“Rather than wait a month and go for a good long-term tenant, I went for someone who appeared to be stuck. He was a little questionable in character, but I was getting my money.”

The result, Kelly says, was that the tenant turned the house into a brothel and skipped within three months. 

“Rent payments became something of a stop-start affair, and then the alarm bells really started ringing when a neighbour called to say that the tenant had brought in a removal truck out of the blue.  I went to investigate but my tenant was heading in the other direction, leaving an abandoned and poorly maintained property in his wake. 

“After the truck had gone, the neighbours came out and started telling me all these stories about men coming in at odd times. It was just bizarre. They’d paid rent accordingly until they stopped and moved out. Then I went through the legal channels: I gave notification that they’d left; I communicated to the bond applicants; and I sent registered mail to the residential address, which was all that was required. 

“The next step was a court hearing, which the tenant failed to turn up to, where I was awarded the bond and all the goods left on the property. Today I still use their washing machine. 

“Don’t be greedy. Do your due diligence and go with the more reliable tenant – even if you have to sacrifice a dollar or two. The greatest risk is not losing $5 a week; it’s a period of vacancy. Then you can lose $200 or $400 a week.”

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