At what point would you accept less than perfect tenants?

Discussion in 'Property Management' started by mja, 26th Feb, 2017.

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  1. mja

    mja Well-Known Member

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    Hi all,

    One of my Wellington properties has been on the market for almost 2 months and no decent tenant in sight. The rent is reasonable and it's in a good street, and there hasn't been any negative comments during inspections. There's been plenty of applications (my property manager gets 1-2 a week), but the applications all get rejected because the tenant has been known to do damage to properties in the past, or the references reveal they are a bad tenant (bad character, don't look after the properties, wilful destruction, etc). Naturally we're hanging out for a decent tenant who will look after the property and pay rent on time, but time is dragging on...

    At what point would you accept a less than perfect tenant and what safeguards would you put in place to avoid damage/destruction?
     
  2. Gockie

    Gockie Life is good ☺️ Premium Member

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    Don't take them! Better to drop the rent. Or can you accept pets?
     
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  3. mja

    mja Well-Known Member

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    Pets are accepted; I wonder if dropping rent to ~ 10% below market rent would be worthwhile...
     
  4. D.T.

    D.T. Specialist Property Manager Business Member

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    Depends with what regard they're less than perfect in.

    I'd rather have a property empty than someone who has done damage before.

    If for other reasons, perhaps give a 6 month trial and then can renew / terminate accordingly.

    If property is solely attracting these types of tenants , perhaps look at the price of the property. Higher prices attract rougher tenants.
     
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  5. Gockie

    Gockie Life is good ☺️ Premium Member

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    Yes do that... And on second thought, this is Wellington NSW you are talking about, I take it? Not an area with a huge number of quality tenants I think. Ok. Wondering, out of all the non desirables, do any have stable employment?
     
    Last edited: 26th Feb, 2017
  6. jins13

    jins13 Well-Known Member

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    Umm what happened? Not so happy with the new tenants?
     
  7. mja

    mja Well-Known Member

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    Good idea. Generally if the tenant isn't already known to my property manager, she starts them off on 3 months and if they're ok, a longer lease after.


    Higher prices or lower prices attract rougher tenants?
     
  8. mja

    mja Well-Known Member

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    Different property. ;)
     
  9. mja

    mja Well-Known Member

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    Yeah, Wellington NSW. I have quite a few properties in town but this one is struggling to rent out. The tenants aren't all horrible, it's just a small town so the pool of available tenants is small.

    I'll ask my property manager to look further, past references, to calling their employment and seeing if it's stable or not.
     
  10. WattleIdo

    WattleIdo midas touch

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    Think about it for a minute.
    If you are intelligent, of sound character and good with money, are you going to choose to live in a simple house that costs more or a simple house that costs less?
     
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  11. Marg4000

    Marg4000 Well-Known Member

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    Logically if you lower the rent you will attract a larger pool of tenants to choose from.
    Marg
     
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  12. D.T.

    D.T. Specialist Property Manager Business Member

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    Higher. But I mean that in a relative sense rather than absolute.

    You see good quality tenants can get approved almost anywhere they want. Desperate ones have the left over houses - low quality and/or overpriced.

    Not familiar with your area at all but I see it in the southern suburbs here all the time. Houses that should be <300 the owners push for 325 and then wonder why they continually get bad tenants. Some PMs enable this behaviour :(
     
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  13. mja

    mja Well-Known Member

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    Thanks DT, WattleIdo and Marg; I'll push my PM for below market rent to get someone in the door with a view to increasing it in ~ 6 months.
     
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  14. Marg4000

    Marg4000 Well-Known Member

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    When we bought our first IP the PM told us that if we asked for rental at the top of the range she would have to take just about anyone who was prepared to pay it. If we charged towards the mid-lower end of the range she could choose who to take.

    Always worked for us and minimised vacancies.
    Marg
     
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  15. Gockie

    Gockie Life is good ☺️ Premium Member

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    I'd suggest even in 6 months keep it under market rent. My gut feel is that finding good tenants in the area isn't easy...
     
  16. Marg4000

    Marg4000 Well-Known Member

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    Agree. If you get a good tenant, don't be in a hurry to raise rents too quickly. If the tenant is worth keeping, a $5 rise every so often may be a good idea.
    Marg
     
  17. Do Androids Dream

    Do Androids Dream Well-Known Member

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    At no point.

    Accepting a bad tenant into your property is like saying you're happy to have your dining room table set on fire provided it doesn't spread to the rest of the house :eek:o_O


    Could you ask the tenants of your other Wellington properties via your PM if they know of any friends or family that may be interested in short-term or long-term leases?
     
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  18. Hodgo

    Hodgo Well-Known Member

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    I'd never take on a bad tennant, I'd rather drop the rent.
     
  19. Anthony Brew

    Anthony Brew Well-Known Member

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    When housing commission requested renting my apartment, my agent said that they have never had problems with housing commission before.
    I mistakenly listened to my agent.

    Tenant turned out to be a drug addict prostitute.
    I mostly feel sorry for the other tenants who had gangs come by, drug paraphernalia lying around where kids see it, security door choked open, etc.
    Finally got her out of the place.
    3 weeks later still trying to get the place ready for new tenants, so with the time of advertising taken to find someone after it is ready, looking at over a month of lost rent along with cost of tribunals to get her legally evicted plus the stress of it.

    It is just not worth it.

    Thank you to your agent for doing these checks on potential renters - I am leaving my agent for not doing theirs.
    I would say after 1 month even of no renters you should start dropping the price. You can increase it up a little after a year or rent. even 10% drop in rent is really not that much in the overall picture.

    Supply and demand is just the nature of it. Less demand means dropping the price to increase supply.
     
  20. SeafordSunshine

    SeafordSunshine Well-Known Member

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    Perhaps targeting the local hospital..
    Staff Notice board
    Public Library
    Staff Notice Board
    etc
    I hope this helps
     
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