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If you are a landlord – or the less feudal term ‘property investor’ – do you think of your tenants as assets or liabilities?
You might worry about getting bad tenants, but are you ever concerned that you might be a bad landlord?
A bad tenant is pretty easy to identify and we’ve seen them on countless TV news magazine shows.
They don’t pay rent on time, wreck the property, break strata rules, become aggressive when challenged and annoy the neighbours. Perm any three from five for an unhappy experience.
These nightmare renters are, of course, in a tiny minority and they aren’t always so easy to spot.
Well dressed with great references and a steady income in a large law firm? I know investors who won’t rent to lawyers because the chances of being constantly harassed with legal threats – some valid, many spurious – increase exponentially.
But getting back to bad landlords, they fall into two basic categories; don’t want to know and don’t care.
In an ideal world, good tenants would find good landlords and their relationships would last longer and more amicably than most marriages.
But, regardless of how good a tenant you are, if your ‘don’t care’ landlords are purely motivated by profit, you could find yourself having to move every year, as churning tenants at the end of every lease is by far the easiest way to raise rents.
Actually, if your landlord is a dedicated tenant flipper, you probably won’t even get a look-in these days, as they’ll already have their flats permanently listed on Airbnb.
However, if you think of your tenants as an asset, just as important as the actual property, then you must address the issue of what it takes to be a good investor.
A bad investor just buys a lump of shares and hopes they provide a steady income and increase in value over time.
A bad landlord – the ‘don’t want to know’ variety – does the same, often with the aid of a rental agent whose main job seems to be to collect the rent and protect the owner from any complaints.
Why would you allow that to happen? If your tenant is behaving badly, they are diminishing the value of your investment and you need to know about it.
So don’t ignore pleas from your neighbours to do something about constant by-law or rules breaches. In most states that’s also a breach of the tenancy agreement so you have considerable heft when you do get involved.
On the other hand, if your neighbours turn out to be tenant-hating strata-fascists, take up cudgels on your renters’ behalf whenever they are misused or abused. You are in the best position to get things done and it’s a responsibility that comes with taking your tenants rent every month.
Wringing your hands and saying “oh, it’s the committee …” butters no parsnips. If need be, get on to the committee and fix things.
Good tenants aren’t that hard to find, but they are harder to hang on to if you ignore them or allow them to be mistreated.
This column first appeared in the Australian Financial Review.
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In our small self managed block we have recently seen both sides. The newest absentee landlord is not really bad, just can’t be bothered and leaves everything up to her managing agent. Rarely bothers to reply to me as Secretary. Tenants, two lawyers, have a problem and agent ignores them. Tells them the particular matter has been referred to ”The Strata” – whoever that is. I hear nothing from them – agent has lied. Tenants then start sending me test messages re a couple of problems to which I respond in order to attempt to be helpful. Contact owner who gets annoyed ”that is a matter for the agent”. More text messages arrive from tenants. I contact Managing Agent who opines ”but you are not a proper Strata are you”. ….”What do you mean?”, I ask.
”Well” says lady agent who has some lengthy grandiose title, maybe Senior Property Manager for the Universe, ”you’re not managed by Jamesons or anyone are you”………Oh dear!!!
Next issue, 6 months previously a decision was made to repair the garage driveway. Contractor gives 2 weeks notice, work will take 4 days and no access available to garage, including mine. Advice is immediately passed onto all residents. No comment from anyone. 2 days before work commences everyone is advised of actual start date and lawyer tenants go feral. I receive 4 text messages one day, Agent rings up on behalf of tenant, ”reminding me” of difficulty tenants now have!! Tenants are very angry. Agent phones every day. Tenants really angry! Tenants want compensation from owner as too difficult to park in street for 4 days as she has to take kids to school and go to gym. Tenants who were cool to everyone previously are now positively hostile and are threatening to sue owner for compensation for lack of access to garage for 4 days. ”Our lease provided access to garage and now we are denied that right”
Wealthy lawyer tenants have now fortunately moved out and as a parting gesture filled the recycling bin up with used nappies and kitchen waste.
Fortunately these horrible creatures have departed. Lesson here though, if future tenants have any problems I will apologise in the nicest way and advise them that all matters must go through their agent. If it’s an emergency of course I’ll deal with it.
On Managing Agents…………there is a company title block of which I am Secretary. As Company Title the owners can decide the suitability of proposed tenants. 6 apartments, a couple of retirees and professional couples. Very quiet block. Usually no problem but this time new owners move overseas and agent is told of general requirements to suit the building – a big advantage of company title. Who does the agent recommend? Two 20 year old males with no rental history, one not working. Property manager then sends an insulting email to the directors, not appreciated at all. I advised the licensee of the agency and the owner was most apologetic and hauled the employee over the coals. Where do they get these people?? I am increasingly finding that so called ”Property Managers” are bloody useless and full of themselves.
Paul2000 – With something as significant as a garage closure I would suggest that too much information is much better than not enough information.
Perhaps a Notice should be placed in the Elevator, and a hand delivered Notice be issued and placed in each of the letter boxes.
As a Committee I would definitely not rely on the absentee Owners or the Real Estate Agents to pass on this information to the Tenants. That being said, in an ideal world where everybody did their job correctly, you would not need to do this.
Thanks Lady P.
To clarify. Small block, two people share the garage the aforementioned tenants and me. 2 car spaces none used that week as owners away. Only 4 apartments. No elevators. Everyone was given 2 weeks notice when commencing date advised. No problem with anyone except the lawyers who on the day the work commenced decided to have a complain even though they could park in the street 20 metres away and I had obtained special council temporary parking stickers for them at my cost.