Dealing with troublesome tenants

Most tenants are reliable, but if you’re a property investor, chances are you’ll encounter at least one bad renter. From failing to pay rent through to causing damage or conducting criminal activity, these tenants can harm your return on investment.

It can be stressful when things go wrong, but try to stay calm and professional, get familiar with the relevant legislation and address the problem promptly and proactively.

Don’t let rent slip
Late rent payments are common, and it’s important to get on top of this issue quickly. You (or your property manager) may wish to call or email the tenant the day after rent was due.

If payment is still not received, you’ll need to issue a breach notice after the tenant has been in arrears for the number of days prescribed by the residential tenancy laws in the relevant state or territory.

Taking the next step
Whether it’s a late rent payment or another concern such as noise complaints, try to resolve the issue by communicating with the tenant either directly or through your property manager. If this doesn’t work, and the tenant has breached the tenancy agreement, you’ll need to issue a breach notice.

The last resort: Eviction
Evicting tenants is a situation all landlords dread, but unfortunately it’s sometimes necessary. If you’ve issued a breach notice but the breach isn’t fixed in the given time frame, the next step is to issue a notice of termination.

However, you can’t just go to the property and kick them out – you’ll need to follow the correct process. Note that the legislation (Residential Tenancies Act or equivalent) varies by state and territory.

Prevention is better than cure
The best way to handle troublesome tenants is to avoid them in the first place. Here are some tips for ensuring a smooth ride:

• If you’re not an experienced investor, consider finding a good property manager.
• Consider landlord insurance. Your mortgage broker can refer you to a specialist to assist with your insurance needs. Also, it’s a good idea to follow a rigorous tenant-application process.
• Communicate regularly with tenants to stay on top of maintenance issues and resolve potential problems before they arise.
• Conduct inspections on a regular basis (check local legislation for guidance on how often you can inspect).