New tenancies, vetting applications

Discussion in 'Property Management' started by Hebro, 6th Apr, 2020.

Join Australia's most dynamic and respected property investment community
  1. Hebro

    Hebro Well-Known Member

    Joined:
    19th Feb, 2020
    Posts:
    113
    Location:
    Aus
    We are building a house that was planned as an IP, and will be ready in about 6 weeks.

    What are your experiences with new leases at the moment? How are agents/investors vetting applications, to try and ensure some likelihood that rental payments will be stable?
     
    Michael Mitchell likes this.
  2. Michael Mitchell

    Michael Mitchell Property Manager Business Member

    Joined:
    17th Sep, 2018
    Posts:
    762
    Location:
    Brisbane
    1. Ability to pay the rent
    • recent pay slips
    • proof of savings to show they could pay rent in absence of employed work
    • Centrelink proof of income statement to prove welfare benefits etc
    • copy of previous tenant ledger or mortgage statement to see what their payment behaviour is like - whether on time, in advance, behind, etc.
    • tenancy database check to see if they have been blacklisted for money owing
    2. Ability to maintain the property
    • physical capability to maintain the yard for example or financial ability to pay someone to do it if need be
    • previous rental history record to demonstrate how they have maintained other properties
    • tenancy database check to see if they have been blacklisted for damage/conduct/other etc
     
    AnneC and TMNT like this.
  3. Hebro

    Hebro Well-Known Member

    Joined:
    19th Feb, 2020
    Posts:
    113
    Location:
    Aus
    Michael
    Do you have a reasonable flow of new tenancies at the moment, or has the pipeline really slowed?
     
  4. Antoni0

    Antoni0 Well-Known Member

    Joined:
    6th Jul, 2017
    Posts:
    549
    Location:
    Birisbane
    I would be leaving the house empty until everything starts to sort itself, I've got a lease ending in June and if the tenants leave there's not a chance I will be putting the house back on the market.
     
    abc_123 likes this.
  5. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    4,021
    Location:
    Perth, WA
    Why? That seems crazy.
     
    housechopper2, Hetty and Rugrat like this.
  6. D.T.

    D.T. Specialist Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    8,863
    Location:
    Adelaide and Gold Coast
    Pretty much the same as before, ensuring they have adequate income to afford the lease.
    Yep, or better even
    Some people have more dollars than sense :p
     
  7. Antoni0

    Antoni0 Well-Known Member

    Joined:
    6th Jul, 2017
    Posts:
    549
    Location:
    Birisbane
    At this stage not many people even know if they'll have future work, I've got friends with a paint shop and they can't even get new stock in.

    If you get stuck with someone that doesn't or can't pay what are you going to do ? I've still got to pay for repairs and water usage on the home, loss of RA fees for finding a tenant.

    I'm already trying to work through with a tenant if they've applied for Centre link and or the rent assistance package in Qld, the payments at the best will not even cover his debts because he has 2 other loans and I can't legally tell him to pay me over the loans he has or defer on the loans.He's waiting for the job keeper package to kick in at his work which might not even eventuate and then delay his centre link application for another further 8 weeks or more.

    Other LL's can do as they like.
     
    Last edited: 6th Apr, 2020
  8. Shazz@

    [email protected] Well-Known Member

    Joined:
    24th Jun, 2018
    Posts:
    726
    Location:
    NSW
    A few people have mentioned that they have lowered the rental (slightly) and asked for tenants to pre-pay up to 6 months. Maybe worth a shot?
     
    Antoni0 likes this.
  9. Michael Mitchell

    Michael Mitchell Property Manager Business Member

    Joined:
    17th Sep, 2018
    Posts:
    762
    Location:
    Brisbane
    Definitely slower, although I've only got 3 vacancies at the moment so not a huge sample size.
     
  10. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    4,021
    Location:
    Perth, WA
    I can see the logic, but I'm not actually sure that's legal.
     
    Michael Mitchell likes this.
  11. Antoni0

    Antoni0 Well-Known Member

    Joined:
    6th Jul, 2017
    Posts:
    549
    Location:
    Birisbane
    I wonder what the legalities are with asking this though, because you will be discriminating against people that can't pay 6 months in advance.
     
  12. abc_123

    abc_123 Well-Known Member

    Joined:
    22nd Feb, 2020
    Posts:
    185
    Location:
    ACT
    Yes and I am presuming OP doesn't have landlord insurance already so won't be able to get that. So accidental and malicious tenant damage not covered either not just rent loss.
     
    Antoni0 likes this.
  13. Michael Mitchell

    Michael Mitchell Property Manager Business Member

    Joined:
    17th Sep, 2018
    Posts:
    762
    Location:
    Brisbane
    Can't make a tenant pay in advance, can ask though.

    *Caveat: prior to a lease commencing under the RTRA Act in Qld you can request up to 4 weeks rent in advance although seldom done, however if you ask them to voluntarily agree to pay more that can be done too. If the tenancy ends prematurely and the Tenant wants a refund, that's a whole 'nother kettle of fish! :p
     
    adprom and [email protected] like this.
  14. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    4,021
    Location:
    Perth, WA
    Actually, I think its probably even risky to ask.

    Off the top of my head, the legislation wording is that its unlawful to "request" a tenant pay more than a certain amount in advance, but not unlawful to "receive" it.

    Best to check in your state or stay away from anything resembling the above.
     
    Michael Mitchell likes this.
  15. Michael Mitchell

    Michael Mitchell Property Manager Business Member

    Joined:
    17th Sep, 2018
    Posts:
    762
    Location:
    Brisbane
    I’ll check, ty for heads up on refresher! :)
     
  16. Omnidragon

    Omnidragon Well-Known Member

    Joined:
    17th Oct, 2015
    Posts:
    1,693
    Location:
    Victoria
    Maybe get got 4 months rent upfront
     
  17. adprom

    adprom Well-Known Member

    Joined:
    3rd Apr, 2020
    Posts:
    170
    Location:
    Melbourne
    Most states that would be illegal.

    In Vic you cannot ask for more than 14 days upfront if rent is weekly. Another example of poor behaviour.
     
  18. Omnidragon

    Omnidragon Well-Known Member

    Joined:
    17th Oct, 2015
    Posts:
    1,693
    Location:
    Victoria
    Oh we want to talk about the law. Is it legal to evict? If it is I'll be doing it when they don't pay.
     
  19. adprom

    adprom Well-Known Member

    Joined:
    3rd Apr, 2020
    Posts:
    170
    Location:
    Melbourne
    Not for the next 6 months at least it won't be.
     
  20. Omnidragon

    Omnidragon Well-Known Member

    Joined:
    17th Oct, 2015
    Posts:
    1,693
    Location:
    Victoria
    Well that's not the law yet. So wouldn't a prudent landlord use this window asap if a tenant is paying 0 to evict them? Going to get no rent anyway, might as well save on the depreciation. Just following the law.