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Not all tenants are created equal

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Your Investment Property | 16 Jul 2014, 09:47 AM Agree 0
The internet is rife with stories about bad tenants and property investors who claim they will ‘never own another investment property’ as a result of their negative tenant experience. So, how do you avoid the trap? How do you choose a suitable tenant for a property you have poured your cash into?
  • Charles | 17 Jul 2014, 11:55 AM Agree 0
    Interested in returns exclusive of tax benefits around 4% - is that achievable?
  • Gregory | 18 Jul 2014, 10:21 AM Agree 0
    Looked at this 15 years ago. Rental returns we're that great then once you factored in all the costs, but maybe worth a re-visit on the current package/offer is now.

    There are a number of tenants out there I call Land Lord killers. Where Land Lord's simply give up & sell up because of all the non-stop hassles. If the property sells to an owner occupier, rents go up as there is one less property for rent in an area. This makes Land Lord killers bad for all parties.
    The number one subject you need to quiz a new tenant on is, where are you living now. Why are you moving? If the answer is, the Land Lord is selling up, then that's a red flag as far as I'm concerned. Looking back on it, 100% of my bad tenants have all been churn's. Moving from one house to another in the same area & sometimes with the same agent.
    I've been told time from agents a couple of times. "Oh, we can't understand it, we've never had any problems from this tenant before? They've been so up to now".
  • Defence Housing Australia | 18 Jul 2014, 03:47 PM Agree 0
    Charles, in response to your question, everyone’s personal circumstances are different. You would need to get in touch with your accountant or personal advisor to determine whether those 4% returns would be achievable for you. We can tell you that gross yields on the bulk of our DHA portfolio would range between 4.8% and 5.5%.
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