We hear about it all the time, the horrors of poor
tenants and the troubles 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 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!
Part of the Veda Group, the National Tenancy Database
has been working with real estate agents across Australia for years, to deliver
reliable tenant checking and connection services with real time identity and
document verification across more than 22 different databases.
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