6 ways to avoid a bad tenant

honest broker 6 ways to avoid a bad tenant

6 ways to avoid a bad tenant

We have all heard the horror stories of tenants causing property damage, being involved in illegal activities, creating noise disruption in the neighbourhood, or finishing the lease in arrears. All of which can cause financial and mental stress for the landlord.

Minimise this risk by knowing the warning signs to look for to avoid getting stuck with a tenant from hell. It’s not foolproof – but certainly worth keeping in mind next time you assess an applicant.

1. False information on the application

False identification and income payment slips can be used by tenants to lie their way into approval. Sometimes it is just the surname changed in order to avoid being detected on the tenancy database because of previous violations. Be diligent in cross checking all forms of identification and make sure signatures match.

2. Having friends as referees

Another trick is to have friends or family pose as employers, previous property managers and personal referees. You can check this by doing a google search of the company of the employer or the property manager to cross check the contact details. If a mobile number was provided on the application, call the business landline instead and ask for the referee. So it is important to ask for the company of the employment or property management referee not just their name.

3. Using personal hardship as persuasion

Be wary of applicants who place great emphasis on their personal difficulties and attempt to gain an approval out of sympathy by taking advantage of a landlord who is a nice person and wants to help. Definitely do not proceed with the lease if a tale of hardship is coupled with a last minute story about not having all of the bond. Our experience shows this is practically a guarantee of a con job.

Regardless of the circumstances be objective towards emotional turmoil presented to you by a prospective tenant and never handover the keys without receiving full funds at signup.

4. Submitting an incomplete application

Deceptive applicants may omit information from their applications to trick their way into a tenancy. A common example is a couple who lodge a single application and do not want the lease is both names. This may indicate that the ‘silent tenant’ is listed on a tenancy database or has some other background issues that will be uncovered during the vetting process. Leaving them off the paperwork allows them to go undetected.

Always insist that any person over the age of 18 submits a full application and is named on the lease.

5. Pressuring you to rush the application process

Ignore an applicants desire for a speedy process where they want to know the status of their application very quickly or if they propose to collect the keys and deposit the money the following day. Similarly, be cautious of tenants who want to lodge an application without inspecting the property. While this can seem a good idea by minimising vacancy times, it can be a ploy to shortcut the screening process by not giving you enough time to thoroughly check the application, or by not meeting them face to face to allow you to make a general assessment.

You may not be allowing yourself sufficient time to have the property properly cleaned and a thorough entry report completed. Remember, the tenant is required to vacate the property in the standard that it was at entry. If you allow the tenants to move in before the house and grounds are clean and tidy, you cannot ask them to leave the place in a higher standard of cleanliness. A detailed entry condition report is second only to the lease in terms of important documents. Never rush it. Conduct thorough checks and never rush an application, it could just save you from a tenant disaster.

6. The applicant is vague about their income

Applicants may falsify or inflate their income to appeal to the landlord as being financially stable. Make sure to collect payslips or bank statements from the last 3 months to verify their ability to pay the rent. As stated before, never accept negotiations on the bond. If the tenant cannot pay the bond in full do not hand over keys. If they can’t afford the bond, they can’t afford the property.

It is wise to borrow from the professionals and screen your applicants through the National Tenancy Database. Not only does the NTD check the ‘tenancy black list’ data, the service also conducts identification verification, bankruptcy status, court rulings and company searches. You should also protect your interests with landlord insurance that covers rent loss and property damage. Often it will be your instincts that will warn you of a potentially bad tenant. If you are suspicious of an applicant you’re probably right.

 

Diane Bukowski
cloud@eezirent.com.au

When I first started my company eezirent I wrote a small online newsletter for private landlords in Australia. It explored the common problems landlords encounter when self-managing. This simple publication has now grown into Honest Broker.

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