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The Nightmare of a Bad Tenant

We hear about it all the time, the horrors of poor tenants and the troubles Real Estate agents go through.

Where does it all start?

Sure – we’ve all heard about screening tenants, and the reasons to do it, but we’ve not yet figured out the best way to do so. Besides, we know how to “judge” a person’s character just from meeting them, they “click” with us and would surely be a good tenant. Unfortunately, as is the case with most con artists, we’ve become yet another victim of their act.

Are all applicants’ bad tenants?

Of course not – but you can consider yourself lucky if even one out of ten applicants are great. In many cases, you settle just to get the property leased or because the landlord can’t afford the costs of an empty property any longer. You did not consider that bad tenants move at least twice as often and apply to at least four times as many places as a good tenant.

Average case – after one year, the tenant moves out. They paid their rent on time (mostly) and now the property is empty for a month whilst you find a new tenant. There may also be a few repairs involved. You start the cycle all over again.

Bad case – the tenant has consistently made late payments or may have missed some altogether in effect breaching their lease. You are forced to give notice to evict your tenant – should be easy since they’re not paying for a service, right? Wrong.

The eviction nightmare

Once it gets to eviction stage, it’s pretty safe to say that the costs are already piling up. A vacant property is the landlord’s biggest expense. Worse than this is not getting rent and having a tenant still living in the property.

You give the tenant a valid 14 day termination notice for not paying rent and serve it to them in person. You pray and hope that the tenant will abide by this order (but as a Property Manager – we know better). The tenant fails to abide by the termination notice and you apply to the Civil & Administrative Tribunal for a possession order. The Tribunal finds that you only gave the tenants 13 days’ notice and you need to start the process again. Eventually, a possession order is granted and the tenants are given yet another date to move out of the property. The tenant still does not vacate and you have to obtain a warrant for possession from the Tribunal which can then be enforced by the police. At the end of this few month long struggle, the property is finally vacant and ready for lease again.

The results

Best case scenario you retain the property management and learn your lesson! Worst case scenario, the landlord takes his management with him and ruins your reputation causing even more financial loss.

Does this really happen?

In a recent survey conducted by National Tenancy Database, agents were asked what some of their more memorable bad tenant experiences were. The results are below:

Of 41  Real Estate agents polled, only 7% were yet to have a bad tenant experience with over 54% having had tenants not paying rent as their worst issue. And what are the costs?

Of the 17 agents who responded, over 50% of agents indicated that a bad tenant has cost them over $1000 (and this may have happened more than once!)

What can you do to avoid these scenarios?

To make sure you’re finding the best tenants possible and keeping yourself covered, it’s now more important than ever to comprehensively screen your tenants. On top of your current screening process, National Tenancy Database are the only comprehensive tenancy screening checks which include blacklisted tenants AND:

  • 1.     Identity verification – make sure the applicants documents are real!
  • 2.     Visa validation – check the visa type and expiry date
  • 3.     Public record check – ensure the tenant isn’t bankrupt or disqualified by ASIC
  • 4.     Financial court records – see if the tenant has any financial judgements against them

 

This extra information could be the key to picking your next great tenant!

 

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Janine Kennedy

Phone: 02 8355 4999 Mobile: 0401 743 011 Email: janine@realplus.com.au

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