Tenants are people after all. They move in with a job, they have friends and family and hopefully, for their sake, they’re in good health. Any one of these circumstances can change in an instant and affect your rental income.
The most effective way to minimise landlord stress is to outsource the day to day ins and outs of managing tenants to a professional property managing agent. From my experience, it is definitely a service worth paying for!
If you’re not there yet and you’re copping some tenant headaches, this article will provide you with an overview of how to go about sorting it out.
On the go? Here’s 30 seconds of key take outs:
- Dealing with tenant problems is part of property investing. The longer you’re in the trade, the more likely you are to have some tenancy challenges to deal with.
- Depending on the State or Territory your property is in, you’ll need to be switched on about tenant and landlord rights and responsibilities.
- Tenants are your trade’s bread and butter but if they can’t pay the rent, or they’ve recklessly damaged your property, you must act early.
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Right up front, here are the two secrets to managing problems with tenants in a way that minimises loss of rental income, and your time. Number one secret is to choose your tenants well. Second but equally important, is to know your rights and responsibilities as a landlord and your tenants’ rights and responsibilities, really well.
How to prevent and manage problems with tenants
As with all of life’s challenges, your best move is to do everything you can to prevent a challenge causing you grief in the first place. Even the best precautionary moves will still throw a tenancy hiccup your way. Depending on which state of Australia your property is located, legislative timelines will vary but the framework for how to deal with problems with tenants is the same.
Here are seven steps you can take to manage through a curly tenancy issue.
Step #1: Know your rights and responsibilities as a landlord
As a landlord you have rights and responsibilities to the tenant of your property. At the same time, your tenant has rights and responsibilities to you, the landlord. From my experience, tenants know their rights well!
If you’ve wisely outsourced to a switched on managing agent, they will understand the legislation inside and out, and you can rest easy.
If you’re taking on this role, you’ll need to get up close and personal with the relevant legislation for the State or Territory your property is located in. You’ll find a list of relevant links at the end of this article.
Not understanding your rights and obligations, could see you in breach of legislation and attract court time and a hefty fine.
Understanding the legislations empowers you to manage the tenancy in a way to ensure you’re not at risk of losing rental income.
Step #2: Make sure the tenancy agreement gives you a sharp legal edge
Straight up, make sure the tenancy terms and conditions are rock solid and crystal clear, to minimise your risk. A good managing agent will have a template in place that works effectively.
If you’re moonlighting as managing agent outside of your day job, I’d recommend getting some good legal advice to get a clearly articulated tenancy agreement in place.
You want a written legal agreement that spells out expectations in plain language with clearly defined timelines.
Here is a list of non-negotiable terms that must be included if you want to minimise your risk, the tenant’s:
- Names and number of tenants that can live in your property
- Rental payment, frequency and due dates
- Duty to inform you, or the managing agent, of maintenance issues
- Duty to pay for damages beyond reasonable wear and tear
- Rights and responsibilities regarding how visitors behave
A good tenancy agreement is super transparent so that if a tenant breaches it, issuing a breach notice fast is a no brainer. Quite simply, your tenancy agreement is an insurance to protect your asset and your income.
Step #3: Take out landlord insurance
While a transparent tenancy agreement acts as an insurance to protect your property and rental income, landlord insurance is a must.
Landlord insurance will protect you against the tenant doing the wrong thing outside of the tenancy agreement, such as:
- Theft or burglary
- Rent defaults
- Wilful property damage
Never skimp on landlord insurance.
Step #4: Book in regular property inspections
Your right to schedule in planned and regular property inspections is your opportunity to get on top of any tenancy or property maintenance issues early.
Here is what to look out for:
- General cleanliness of the property
- Signs of wear and tear that need attention, or damage
- Signs of pets or more tenants than agreed on in the tenancy terms
- Maintenance needs that haven’t been called out by the tenant, and should have been.
Step #5: Build positive relationships with your tenant
As with any good relationship, you need to invest some time and effort if you’re after a long term gig.
Responding swiftly to reasonable requests for property maintenance, giving sufficient notice for scheduling in property inspections and maintaining timely communications will all be welcomed by tenants that love living where they’re living. Good tenants that love living in your property will keep your rental income prospects healthy.
Step #6: Whip out breach notices fast
In the event that there is a tenancy agreement breach by the tenant, letting them know immediately will give them time to resolve the issue. In the event of an oversight on their part your tenant will welcome the prompt notice and will be motivated to sort it out.
Step #7: Be prepared to trigger the eviction process
If the timeframe passes following issue of a tenancy breach notice and your tenant hasn’t corrected the breach, it is time to commence the eviction process.
There is work involved, including giving tenants time frames to vacate your property and submitting an application to the State or Territory’s rental authority to request a hearing. If you’ve done the right thing, but your tenant hasn’t, an order to evict will be the outcome of a rental authority hearing.
Facilitating the eviction process is where having a good managing agent looking after your tenancy and rental income is a blessing that will save you headaches and time.
Every trade has its handful of less desirable tasks, and with property investment this is one of these.
If you’ve done your homework and built a well designed investment property in a desirable location, your managing agent will have a waiting list of suitable tenants to choose from!
Where to go in each state or territory to find out legislative ins and outs
Being a landlord in Queensland
Website: Queensland Residential Tenancies Authority
Legislation: Queensland Legislation > Residential Tenancies & Rooming Accommodation Act 2008
Tribunal: Queensland Residential Tenancies Authority
Being a landlord in New South Wales
Website: NSW Fair Trading > Tenants and Home Owners > Being a Landlord
Legislation: NSW Legislation > Residential Tenancies Act 2010
Tribunal: NSW Civil & Administrative Tribunal > Tenancy
Northern Territory
Website: Northern Territory Consumer Affairs
Legislation: Australasian Legal Information Institute > NT Residential Tenancies Act
Tribunal: Northern Territory Civil and Administrative Tribunal
Being a landlord in South Australia
Website: South Australia Department of Premier and Cabinet > Housing > Property Management
Legislation: South Australia Legislation > Residential Tenancies Act 1995
Tribunal: South Australian Civil and Administrative Tribunal
Being a landlord in Tasmania
Website: Consumer Affairs and Fair Trading > Renting
Legislation: Australasian Legal Information Institute > Tasmanian Consolidated Acts > Residential Tenancy Act 1997
Tribunal: Consumer Affairs and Fair Trading > Residential Tenancy Commissioner
Being a landlord in Victoria
Website: Consumer Affairs Victoria > Housing and Accommodation > Property Management
Legislation: Victoria Legislation > Residential Tenancies Act 1997
Tribunal: Victorian Civil and Administrative Tribunal
Being a landlord in Western Australia
Website: Department of Commerce > Consumer Protection > Landlords tools and checklist
Legislation: Australasian Legal Information Institute > Western Australian Current Acts > Residential Tenancies Act 1987
Tribunal: Magistrates Court of Western Australia > Civil Matters
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