How to deal with problem tenants
If you are a property investor and you are researching on how to deal with bad tenants, it is likely that you have a problem tenant or you’re getting prepared to deal with troublesome tenants. The majority of tenants are reliable, but most property investors will at least one bad renter. From failing to pay rent through to causing damage or conducting criminal activity, these tenants can harm your return on investment.
It is very annoying and can be stressful when things go wrong, but try to stay calm and professional, get familiar with the relevant legislation and address the problem promptly and proactively.
What to do if the rent is overdue
Late rent payments are common, and it’s important to get on top of this issue quickly. You (or your property manager) may wish to call or email the tenant the day after rent was due.
If payment is still not received, you’ll need to issue a breach notice after the tenant has been in arrears for the number of days prescribed by the residential tenancy laws in the relevant state or territory.
When to issue a breach notice
Whether it’s a late rent payment or another concern such as noise complaints, try to resolve the issue by communicating with the tenant either directly or through your property manager. If this doesn’t work, and the tenant has breached the tenancy agreement, you’ll need to issue a breach notice.
To evict or not to evict
Evicting tenants is a situation all landlords dread, but unfortunately it’s sometimes necessary. If you’ve issued a breach notice but the breach isn’t fixed in the given time frame, the next step is to issue a notice of termination.
However, you can’t just go to the property and kick them out – you’ll need to follow the correct process. Note that the legislation (Residential Tenancies Act or equivalent) varies by state and territory.
Prevention is better than cure
The best way to handle troublesome tenants is to avoid them in the first place. Here are some tips for ensuring a smooth ride:
- If you’re not an experienced investor, consider finding a good property manager.
- Consider landlord insurance. Your mortgage broker can refer you to a specialist to assist with your insurance needs. Also, it’s a good idea to follow a rigorous tenant-application process.
- Communicate regularly with tenants to stay on top of maintenance issues and resolve potential problems before they arise.
- Conduct inspections on a regular basis (check local legislation for guidance on how often you can inspect).
At Mortgage Corp, we work with experienced and reliable property managers and other important network property experts to assist our clients with the optimal structuring of their property portfolio. To find out how we can help you grow your property portfolio, speak to a Mortgage Corp Loan Specialist today.
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