New tenancies, vetting applications

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?

 

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

 

Michael
Do you have a reasonable flow of new tenancies at the moment, or has the pipeline really slowed?

 

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.

 

Why? That seems crazy.

 

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

 

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.

 

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?

 

Definitely slower, although I've only got 3 vacancies at the moment so not a huge sample size.

 

I can see the logic, but I'm not actually sure that's legal.

 

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.

 

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.

 

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!

 

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.

 

I’ll check, ty for heads up on refresher!

 

Maybe get got 4 months rent upfront

 

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.

 

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.

 

Not for the next 6 months at least it won't be.

 

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.