Camping takes the cake

Usually my stories are about things tenants have done, because usually tenants are the hardest thing about being a property investor.  Occasionally though, there is a client who takes the cake.  This is one of those occasions.

I have a client who has, lets say, a different world view.  They just don't seem to grasp some concepts, like, maintenance work needs to be done, or no, you can't stay at the property while you do it, because the tenant lives there.  I have explained the latter several times, let me tell you about it.

On the first occasion, the landlord wanted us to rent out the property, but not the downstairs bedroom, accessible from the laundry, because they wanted to use it when they came to town.  "So you will go in and out of the tenants laundry to get to your room?" I clarified.  
"Yes, indeed" the landlord said, glad I was getting their intention.  
"What will you do for food?"  I asked.  
"I'll bring my own sandwiches and stuff, it will be alright",  the landlord assured me.  
"And what will you do if you need to use the bathroom?" I asked, wondering when it would click that this was absurd.  
"Oh, I'm sure the tenant wont mind if I pop in to use the bathroom" was the reply.  Oh yes they would!  I had to explain long and loudly that this would not be OK, it was a complete breach of the tenants peaceful occupancy of the property.  In addition, it would not be appropriate for him to use a corner of the section, public indecency, health and safety and all that.  I had to add that in, because he thought very differently than most of us do. After about two hours of my lecturing, he finally said "fine, I'll get somewhere else to stay, or come when the property is empty".  Fine, I thought, this is sorted.

Fast forward a year.

The landlord is coming to town to do some essential maintenance.  He lets me know by email, and I respond with "Where are you staying?", the memory of my long lecture still fresh in my mind.  I get no response to the question, so I ask it again, and add "you can't stay at the property as it's tenanted".  Still no response.

On the day the landlord is due in town, I get a phone call from the tenant.

"The landlord has turned up to do the work" they say.  
"That's nice, hows it going?" I ask, wondering if this is just a 'touching base' call, or if it is another chapter in the comedy that is this client.  Turns out to be the latter.
"Ah, fine, but he wants to camp on the grounds, with his whole family" the tenant says.
"Right, I see" I say, this is definitely the latter.  "I'll try to call him.  In the meantime, stand up for your rights, he cannot stay there, and you have our full support to tell him to go away.  If I need to, I will come around myself, so let me know if he starts to pitch a tent".  In my mind, I have visions of the cops being called. I left a message for the landlord on his cell phone asking him to call me, and find somewhere else to stay.  I could just imagine that he would be staying with me at my house as a result, but I was firm in my resolve.

Unbelievably, after he and I talked and I made it clear that there were things he could do, and things like stay at the property he could not, he gets grumpy at me that I am not allowing him to use his property, and he threatens to go elsewhere for property management.  "Thank you" I say, "I don't want to have our reputation damaged by someone who refuses to obey the law and ignores our advice on this topic, please do get another company to manage your property.  I don't want to have to defend you and us against the tenants very strong case for compensation in Tribunal".  Well, that was a wake up call.  He backed down and finally agreed to do what we asked, until the next episode, anyway.  Don't think I haven't heard the end of the complaints about how much his accommodation is costing him. 

I have made it very clear to this client that he is on probation.  Any more issues, and he is finding himself someone else to argue with over his tenants rights.

Christmas Pressies

I think it is a really good idea to give tenants a gift at Christmas to say ‘thanks’ for being your customer.  Box of chocolates, grocery or gift basket/voucher, it is all a good idea.  Like all gifts, there is beauty in the execution of it, so make sure the wrapping and the presentation is all in keeping with the manner you intended for maximum good will.

Don’t do what this Auckland landlord did.  He put together a gift basket and took it around to his rental property, only to find the tenants were not home.  Not wanting to leave it on the doorstep for it to get rained on or go walking off by itself, he let himself in and left it proudly presented on the kitchen bench.  When the tenants returned from holiday, they were less than impressed with the unauthorized access, and took the matter to Tribunal.  They won.
 
Lesson?  Call before you drop around, and if the tenants are not going to be at home, get explicit permission from the tenants to leave your gift inside (i.e. talk to them) before doing so.  You can imagine the landlord felt pretty hard done by in being penalized by doing a good deed.  However, he really should not have gone inside without notice or permission – no amount of gourmet olives or chocolates would make that right.  Remember, it may be your house, but it is someone else’s home.  Keep out of trouble this Christmas by respecting that.

Why inspect every three months?

There is a temptation for landlords to not do regular inspections, particularly if the tenant has been good for the previous inspections and they have been there a while.  If you fall into this category, you are not alone.  My estimate from talking with landlords is that 90% do not inspect every 3 months.  The worst I've heard is a landlord that hasn't inspected the property in the 15 years his tenant has been in there.  Not surprisingly, it was 'a bit of a tip'.  So take this tip:  Regular, frequent inspections are vital.

So why don't people inspect regularly?  Well, I think it has something to do with intruding on the tenants life and being judgemental about how they live.  Certainly it also has something to do with there being more exciting things to do in life, otherwise known as 'being lazy'.  

So, how do we avoid the discomfort that comes with doing inspections?  Turn around the purpose of the inspection.  It isn't about checking up on the tenants and making sure they are looking after your house (well, maybe a teensy bit of that).  It is about ensuring maintenance is kept up to date to give the tenants a quality product.  When you inspect, the way the tenants are treating the property is a by-product of your inspection, not the focus.  We want the properties to be nice and tidy when we go inspect so we can get to and check all the likely problem areas in a property.  What are these?  I can hear the cynics say 'the tenants'.  Read and learn.

Inspection hot spots are the places where there is a lot of use, a lot of water, or a lot of movement.  So, door handles and hinges are checked to make sure they are performing correctly.  Light switches are not loose or damaged to make sure they are safe.  All taps are checked to be functional, not dripping, and not too hot.  Under sinks are checked to make sure there are no leaks.  Hot water cupboards are checked for leaking valves or pipes.  Cupboard doors and drawers are opened and shut to make sure hinges and runners are fine.  Likewise window.  Curtain linings are checked for signs of mould, a sign of moisture issues in the property.  Hallways are checked for wear to the walls and flooring - a good sign of when to redecorate.  Toilets flush and don't leak or smell from bad connections.  Externally, gutters, spouting, and gully's are inspected for blockages... you get the idea.  If you happen to notice the tenants have damaged the property during this inspection you can address it.  It is much easier to hold tenants accountable for damage if you are always keeping the property in good condition.

Some will say 'but the tenant will tell me if something goes wrong'.  Will they?  I don't know about you, but there are parts of my house that I rarely venture into.  My partner will tell you that's the kitchen.  But, realistically, how many times in the last year have I had reason to open the hot water cupboard?  Maybe twice?  The cupboard under the laundry sink?  We just keep our emergency water there, so probably not since I last filled it (I think I filled it after Christchurch's February 2010 Quake.  Which reminds me...).  And this is me, property manager extraordinaire who knows what problems can occur, and I can't help but spot issues in every house I visit, even if socially.  Tenants can't be relied on to check every part of the house regularly, or even to realise there are problems when they are occurring.  It's just not in their job description.  Unless someone knows what to look for, they might not even see it.  I've seen lots of examples of slow leaks that no one noticed until it was pretty darn apparent, carpet rotting, mould everywhere, bad smell, wall crumbling.  Its a lot more common than you think.  You can't rely on a tenant picking up these issues.

Things can also change.  I had a lovely tenant in one of my properties.  Sweet young thing, very pleasant.  Had been there for over a year, and along we came for our routine inspection to discover her brother was now out of jail and was doing unauthorised renovations which included a kick-@ss security system around a specialised hobby in the garage - you can guess what.  Lucky we knew it wasn't there 3 months previously.  Neither of them were there three months on from the inspection.  Just because we were checking the house for maintenance didn't mean we were blind to the tenants actions.

Insurance companies love property inspections.  They probably reason why should they protect your asset if you wont?  So, don't get caught out by not inspecting.  Do document your inspections so you can prove you were there.  Keep copies of your notice letters to the tenant.  Take photos of the property with a time and date stamp, if for nothing else but monitoring the condition.  If the property looks fantastic, take photos to use in your next marketing.  We make sure we take photos of things that may be degrading, for example, cracks in a driveway, so we can tell if it is stable or continuing to get worse.  Leave a thank you note for the tenant and take a photo of the note on the kitchen bench - you never know if you need to recall it as evidence.

Good inspections are a lot of work, they do take time and forward planning to do properly.  If you can't be bothered, outsource it by getting great property management to do it for you.  Yes, it may cost money to do it.  But, the report you get each inspection should be a good piece of evidence for your insurance company, and that could be worth thousands of dollars to you.  If you ask your property manager not to bother inspecting regularly and they agree, change to a better property manager.  Great ones will never act contrary to your best interest and best practice, even if you ask them to.  They know how much not inspecting costs.

Keeping Safe with Strangers

We’d like to think ‘dicey’ situations are rare in New Zealand, but they are a lot more common than we’d imagine.  When dealing with prospective tenants, it pays to keep safety in mind.  Here are some tips for keeping safe when meeting with strangers:

1. Let someone know where you are, who you are meeting, and when you are expected back.
2. Keep your exits in mind.  It is better to leave a stranger in your house, than not leave at all.
3. Keep your cell phone on you, charged, and ready to dial emergency numbers at speed.
4. Have a ‘safety phrase’ that everyone knows, and you can use to alert someone when you are in trouble. "Help Help, call the police" is probably not subtle enough if you are trying to avert disaster.  Try ‘Darling, I’m running late, can you pick up the kids from preschool?’ if you don’t have preschoolers.  The recipient of the message should understand they are to send the police immediately to your location.
5. Be ready to run.  Keep your shoes sensible, and your belongings on your person.
6. Park your car where you won’t be blocked in, and don’t have to reverse to exit quickly. Don't park in the driveway, garage, or pointing the wrong way in a cul-de-sac.
7. Don’t be confrontational.  If a situation is escalating, keep calm and be non-threatening, but stay in control.
8. Use social niceties to your advantage – ‘thank you so much for coming’ while moving towards the door can be more powerful than ‘please leave’ if you use it at the right time.
9. Don’t comply if someone wants to take you in their vehicle, get in your vehicle, or tries to restrain you.  Avoid being an easy victim.  If this happens, fight, loudly attract attention, and escape.
10. Walk behind strangers, not in front, when showing a property so you’re not surprised from behind.
11. Trust your instinct.  Wouldn’t you rather feel foolish than feel pain?
12. Call the police.  The police strongly encourage people to call when threatened, and you will be taken seriously.  Chances are you are not alone in your experience with this person.  Report it to the police, you may save someone else a whole heap of grief.

Remember, bad situations are rare, and you can do something to keep them that way.  Stay safe out there.

If you have any other safety tips, feel free to post a comment!

Halogen Hell.

If you want to get to know the clerk at your local light shop really well, install halogen lights.  Halogens can be relied on to last about as long as it takes to drive back from the store with the replacements for the last ones that blew.  If you are lucky, you’ll have time to find the step ladder too before ‘pop’ there goes another one.

Not only is this wasteful of resources – all those bulbs in landfill, all the trips back and forth to the light shop, it isn’t all that energy efficient either.  I’d argue you get more usable light from one 100w incandescent bulb than you do from two 50w halogens.  Not as romantic a light, but more practical.

If you are serious about developing a romance at the light shop, well, sometimes the planet needs to take second place to true love.  If love is off the cards, think carefully about the type of lights you install.

Tenants hate halogens.  Not only do they need replacing every 4.3 seconds, they cost more than regular bulbs to replace.  They are also really hot to touch, so they can’t be replaced the instant they blow, they need to be allowed to cool down first.  Halogen burns – I have a number of scars on my inquisitive fingers to prove it.  That’s what I get for touching the merchandise when I’m light shopping.

They can last longer if the cotton gloves literally go on when changing bulbs.  The oils from your skin can create hot spots, and that’s not a good thing for delicate bulbs.  I’d hate to think of the effect of kitchen splatter.  But, better yet, just install ordinary fittings, not halogens.  You can also fit these with compact florescents too, to save energy.

Have you got what it takes to be a Property Manager?

Rental Results is an award-winning property management company offering high quality property management service to investors with property in Wellington, Hutt Valley and Porirua. While Rental Results is relatively new, the director is widely respected for her expertise, professionalism, and quality of service, and seeks person cut from the same cloth to join our small team.

Our property manager would be responsible for all aspects of residential property management, including but not limited to:
• liaising with clients
• finding and managing tenants
• regular property inspections
• arranging maintenance with trades people
• applying to and attending Tenancy Tribunal
• project managing renovations
• related administration duties
If you have a broad skill-set, this is the role for you.

The person we seek:
• has a positive attitude - no problem is too hard to overcome, and they seek win-win outcomes
• takes pride in their work and has a strong sense of responsibility (sleepless nights if they don't do what they said they will)
• is assertive and can say ‘no’ when necessary
• has sales skills to rent property and gain new clients
• has great time management and organisational skills (we're not kidding)
• has great customer service and ability to relate to a wide variety of people
• has a good judge of character (can spot a liar before it’s too late)
• is calm under pressure and many demands on time and attention
• has good computer skills, including internet and Microsoft Office Suite
• has excellent communication skills, particularly written
• has a clean drivers licence, good credit and no criminal history (we will be checking)

Ideally they:
• have some experience with renovation or maintenance (you know a paintbrush from a plunger – although you won’t actually use either on the job)
• have experience or interest in property investment
• are mature (attitude, not necessarily age)
• are able to have fun, even when the whole world seems to be against them

We will extend your comfort zone and your skill set - if you love being challenged, you'll relish this. This is a position involving a high degree of trust and responsibility, and you will need to be an ambassador for the company at all times. There is no ‘job description’ – you are expected to do what needs to be done. Hours are somewhat flexible, with this full time position conducted any time between 7am and 7pm Monday to Friday and there is occasional 'on-call' work involved on a rostered basis. You will be provided with a cell phone and there is a work car available for use.

We won’t lie to you, with every job there are downsides. From time to time the role can be stressful and disheartening. You may be shocked by what you find on occasion and there will be some long hours in our busy season. However, if you can find the funny side of most situations you will find yourself in an exceptionally fulfilling position. We have a very supportive tight-knit team with a great sense of humour. We do things differently and think outside the box. At Rental Results we work together and capitalise on each individual’s strengths.

You will get to go to conferences and other development opportunities where you will develop a greater financial literacy and will learn a lot about property management and investment- while having a whole lot of fun! You will have access to professional associations and their benefits and you will meet a large number of people, many influential (as they say, you are who your friends are).

We offer comprehensive on-the-job training, so no previous experience as a property manager is necessary. The role would suit someone changing careers, leaving tertiary study, or returning full-time to the work force.

This role can be challenging, but also immensely rewarding. If you take pride in your service apply now with your CV and cover letter emailed to annelise@rentalresults.co.nz. Position to start ASAP.

You must be eligible to work in NZ to apply for this role.

*** Applicants please note: ***

We have an incredible team in place. If you think you have what it takes to be the best, impress the heck out of us! Please research us before putting in your application. To get an interview, show you know your stuff.

Jackie Thomas-Teague
021 681 481
04 4711880

Real Estate Agent Friday, Property Manager Monday.

Last weekend I was looking at a property with a real estate agent.  ‘I’m intrigued by your car’ he said, commenting on the sign-writing, ‘is it your business?’.  I explained that indeed I ran a successful property management company in the Wellington area.  ‘Fantastic!’ he said.  ‘I’m in that industry too.  Our company property manager resigned on Friday, so the office manager said come Monday morning, I’m it’.  Not surprisingly, this was the extent of his knowledge about his new career.  Yup, that’s the quality of property manager some companies have.  Not a career choice, certainly not a vocation, or a calling, but ‘bugger, the seats empty, who’s fool enough to say yes to sitting in it?’.  Sigh.  It is this sort of recruitment process that makes me weep for all the landlords and tenants and houses damaged by such lack of care and passion.  It makes me weep for all the property managers who do give it their all but are tainted with the same brush.  It makes me weep about all the wannabes who apply to work at Rental Results without a clue about what it takes.  That X factor is hard to describe.  I tried to explain the other day to someone that it takes an iron fist in a velvet glove, but that doesn’t really capture it.  Take a look at our recruitment advert here to learn more about the skills and attributes we look for.  Not surprisingly, there are few who fit the bill.  But that’s fine.  We know it takes a special someone to be part of the team and give it what we do.  If you know that special someone, show them our advert.  We are dedicated to having the best property management team in the country.

Test - should you do your own maintenance?

Most people find being a ‘hands-on’ landlord doing their own maintenance, is not as fun as they imagined, particularly when the property manager starts to also nag them to ‘get the work done already before a bigger problem occurs’.  Some of our clients have learned the hard way that they are not cut out for doing their own work, and it really is far cheaper, and a lot less stress, to have Rental Results handle it.

So, before you volunteer to do your own maintenance, ask yourself these ten simple questions:

Be honest, and don't cheat and look at the correct answers below first.
 

1. Am I trade qualified in the field of the work I am about to do?
2. Do I carry sufficient insurance?
3. Will my doing the work invalidate any insurance claim, current or in the future?
4. Can I get it done within 4 hours of being advised of the problem?
5.  Will I get it done then?
6. Do I have all the tools I need to do it safely and quickly?
7. Do I have the knowledge to do it in a tradesman-like manner?
8. Would I be happy to pay someone to do the repair to the same quality as I can do?
9. Can I tell the tenant ‘speak to your property manager about that’ if they ask me for anything?
10. Do I have better things to do?
 

If you have answered “Yes, Yes, No, Yes, Yes, Yes, Yes, Yes, Yes, and No”, in that order, then sure, go ahead and do your own maintenance.  

Any answers contrary to those, go hang up your tool belt immediately, get Rental Results to handle it, and relax.  You’ve just made the world a better place.

Maximising Your Rent

How Do You Determine the Best Rent For My Property?
 

We always strive to get you the maximum rent possible; however we also must keep in mind setting the correct market rent to get your property rented as soon as possible. Both factors are important to present your property on the market successfully for rent.
 

To do this, we consider these factors:
 

a) Demand- Is there a high or low demand for properties at present. This can be seasonal and affected by a number of factors.
 

b) What Is Available Now- we look at properties currently available for rent in the newspaper and/or the internet, and consider their location and features for comparison to calculate a maximum rent for your property.
 

c) What We Have Rented Right Now- We compare your property with what we have currently rented, taking into account property location and features.

d) What properties in the area have rented for over the last 6 months.  This data is available from bonds collected.
 

These factors allow us to give you enough information to set the right rent for your property.

Warmer and Drier Homes

This flu season has reiterated the need for having warm and dry homes.  Here’s a quick run-down on things you can do to make your property healthier for tenants:

• Insulate ceiling and under-floor
• Install good heating, such as a heatpump
• Install fans in bathrooms, connected to light by a timer switch
• Install a ducted rangehood over the stove
• Ensure windows can be left open securely to ventilate
• Provide thermal drapes hung properly
• Provide outside area to hang clothes, particularly in wet weather
• Buy properties which get good sun
• Cut back trees which shade the house
• Clean the exterior of mould and mildew and slime
• Clear the gutters
• Unblock drains
• Fix any leaks
• Install an HRV system
• Create windbreaks to shelter the house

What happens if my tenant does not pay the rent?

Paying the rent is always a voluntary action on behalf of the tenant. We can never force a tenant to pay their rent. Even a tribunal can only ‘order’ a tenant to pay but can never physically force them to pay.

If a tenant does get behind in their rent payments, this is the process we follow:
 
1 day behind – we email tenants a reminder to pay rent today.  In most cases, this is the end of the matter, tenants pay their rent.
 
2 days behind- we phone tenants to discuss payment to be made today.  Again, this often prompts tenants to resolve the issue immediately.
 
3 days behind – we issue a 14-day-notice to remedy, which is a legal notice for them to pay the rent or face possible eviction through Tenancy Tribunal.  If tenants reach this point, they usually make payment in the face of such consequences.
 
8 days behind – if they have missed the second rent payment in a row, or we have not been able to contact with them, we notify tenants that we are going to apply to Tenancy Tribunal for repayment of arrears or eviction under Section 56 of the Residential Tenancies Act.  For tenants who are avoiding dealing with their situation, this usually prompts them to respond.
 
21 Days Behind- The 14-day-notice issued will have expired.  We apply to Tenancy Tribunal if not already done so, but now we will be seeking immediate eviction under Section 55 of the Residential Tenancies Act.
 
Tenancy Tribunal may take up to 4 weeks to get a hearing, and we have known this to be longer during busy times of year.  The adjudicator may decide to adjourn a hearing if there is insufficient time to hear all evidence, which may be up to another month to schedule a new hearing time.  They may also reserve their decision, which can also take around a month.
As you can see, the full legal process can be very drawn out and lengthy.

How do we know what needs to be done?

There are two ways we find out about maintenance needed.  The first is when we do a property inspection.  We will write you a report which outlines the things that need doing now, and in the future. 

The second way is when tenants contact us to let us know about an issue.   In some cases we are able to talk the tenant through to a solution (e.g. they have overloaded the circuit and they just need to re-set it), and in others, a tradesperson needs to be sent.
 
Property investors have different levels of involvement, some preferring to leave it all to us to arrange trades-people, others want us to use their tried and true trades-people, while others want to do it themselves.  All of these options have benefits and drawbacks, and we explore these further in another blog.
 
No matter who performs repairs and maintenance, there are some key points to keep in mind:
 
1. Access arrangements – tenants must be contacted 24 hours before repairs and maintenance is done, unless in an emergency.
2. Repairs must be done in a timely manner, and to a standard in consideration with the age and character of the property.
3. Tenants and their belongings are to be respected – they should not need to clean up after trades-people, or have their cleaning items used for this.
4. Sites should be left secure at all times.
5. Rental Results is to be kept informed on the issues.  For example, if the issue is something that should be charged back to the tenant, or has an impact on the tenancy.
 
There are serious consequences that can arise from breaching these key points.  All of our trades-people are aware of the need to treat tenants and issues correctly, thereby minimising risks to you.

What can I do if a tenant commits a breach in a fixed term tenancy?

If the tenant is in a fixed term tenancy and they breach their agreement, do we need to keep them until the end?

No matter whether tenants are on a fixed term or periodic tenancy, if they have breached the agreement there can be steps taken to resolve the issue, including eviction if needed.  The only difference is under a periodic tenancy a tenant can be given 90-days-notice-to-vacate without a reason given.  We feel if a tenancy has been unsatisfactory enough to terminate, the provisions of eviction under the Residential Tenancies Act are preferable to issuing a 90-day-notice-to-vacate.

A dog for every hole?

What is 'below average'?

I’ve been doing a large number of rental appraisals, and recently was asked to view a property in Lower Hutt which was, ahem, below average.   It and it’s neighbor were both in a serious need of repainting, not to mention the rot in the exterior boards including a windowsill which had been repaired with tin.  The front ‘yard’ was concrete and filled with left-over bits and pieces, some weedy garden boxes, bonnets and other panels of cars, moss and slime.  The front door knob and lock had recently been replaced (the last tenants didn't return the keys), but daylight showed around the handle as it didn’t quite fit the hole.  Inside the picture wasn’t much better.  Cobwebs, dirty splattered carpet and walls, bits and pieces from the last tenants, including towels in the bathroom, a filthy toilet… you get the idea.  There was an open fire there, but the landlord said ‘I just tell tenants not to use it as I’m not sure if it is safe’.  I’d bet a dollar it wasn’t safe.  Why it wasn’t checked out or blocked up is beyond me.  If someone is cold, they’ll risk using the fire, safe or no. 

Building code, what building code?

The backyard featured more concrete and a shed constructed by some long ago tenant and used as an extra bedroom over the years.  It wasn’t to building code, needless to say.  The rent was about $100 per week less than it would have been if some really basic cosmetic stuff was deal with (i.e. clean up and chuck out the rubbish, put drapes back on the tracks), and then get a good deal on insulation and heat pump, and hell, maybe splash some paint around, particularly on the street frontage.  The landlord told me ‘it costs too much to do the clean-up.  I just tell the new tenants they can have the first week free if they clean the place up’.  I reckon it costs less to clean it than a weeks rent, and the additional rent by improving the property would pay it back in no time, the rest is then gravy.

Background checks are for wimps!

Obviously they haven’t heard that providing a property ‘reasonably clean and tidy’ is a requirement of the Act, and besides, any tenants who wanted to move into it in that state would not be the kind to do a great tidy up, and leave it tidy themselves, so perpetuating the problem.  How many free weeks do they want to give away?  The landlord went on to tell me that he doesn’t do background checks, because ‘if they can stomp up with the bond, and they seem OK, then they’ll be good enough’.  I hear drug dealers and pimps are pretty flush with cash, but hey, what would I know?  I do background checks and I don’t seem to get those kinds in our properties.

It's never cheaper than now.

I left the property smiling, glad that there are properties like these to take the tenants I won’t take.  I feel sad for the property owner though, they’re missing out on thousands of dollars every year, and getting bad tenants damaging their property to boot.  It’s never going to be cheaper to fix the issues there because they will just get worse in time.  If their plan is to sell the property at land value, then fine, they should keep improvements to a minimum.  However, every human being deserves a clean home.  Thank goodness they were only wanting dogs.

Bad Tenants = Short Term Investor (why choosing great tenants, or getting someone else to deal with them, is the key to staying in the game)

Wellington Property Investors’ Association recently had experienced investors come and talk to their meetings every Monday during May.  The plan was to reveal different investing strategies that work for investors and the plusses and minuses of these.  However, the unintentional but recurring theme throughout all the talks was the importance of getting good tenants.  Every single speaker mentioned just how vital this was to their success.  Many had developed robust strategies for choosing great tenants, often refined from making plenty of mistakes!  One warned about the perils of renting to family members.  Another found they had a brothel in their property, and a whole heap of unauthorized renovations.  Another had a tenant who infested the entire 11 room property with bedbugs.  Funny stories in hindsight, but all experienced their fair share of stress when it was going on.  It is often easy to give up and sell when a bad tenancy situation arises.  And many a landlord has used the old ‘house is going on the market, you’ll have to leave’ excuse to avoid confronting a less than perfect tenant.  Sadly, the market is not always kind to them, and their investment experience dints their confidence and their bank account.  I know several people who have sold properties for less than they paid for them just because they wanted the pain to end.

A bad tenant is a hiccough in your investment journey, it doesn’t need to be the end.  One bad tenant is an education and a valuable experience.  Two bad tenants, and you should consider doing things differently.  Three or more bad tenants?  For goodness sakes, improve your property (get advice on the top priorities) and get a competent property manager looking after it lickety-split.  Clearly you are not cut out to pick tenants yourself.  Can’t afford a property manager? Really?  How much does sorting things out after bad tenants cost you?  What damage was done to the property and your psyche?  What is the value of peace of mind? 

A number of our clients comment that our service is actually free for them, because things go so much more smoothly, they get better rent, the property is filled faster, and they get time with their families again.  One even credited us with saving their marriage.  We didn’t know we had, but nice to be able to help.

So if you have a bad tenant that is putting you under stress, don’t give up, get help.  Rental Results, that’s what we do.

How often do you go to Tribunal?

A client of mine commented recently that they had been to a seminar where another property management company was presenting, and they said they never had been to Tenancy Tribunal, and were promoting this as their point of difference. So, my client asked me, "How often do you go to Tribunal?".
Frankly, we go more often than we would like.
Accurately, even once would be more often than we would like.
Also accurately, we do very well at Tenancy Tribunal and have a very good success rate when there are issues that need to be resolved but couldn't be resolved otherwise.
Property managers who don't take tenants to Tribunal are perhaps not looking after their client, the landlords, best interests. I have seen for myself many instances where landlords are dissatisfied with the care shown by tenants, and by proxie, their property managers. Stains on carpets are left as they are, chalked up to 'wear and tear' rather than asking the carpets to be cleaned or paying for the cost of patching these to be paid. This is only one example of many where damage is in excess of 'fair wear and tear' and is the tenants responsibility to put right, but the property manager ducks the confrontation and lets them get away with it. Over time, these things add up, and the property rents for less and less, and attracts lower quality tenants, which further damage the property. Alternatively, the landlord needs to pay for these repairs, which erodes the income they are supposed to be making from the property. One way or another, a property manager who does not hold tenants responsible for their own actions costs the landlord.
The property managers who boast that they do not go to Tribunal will state this is because they are 'just that good' they never have any issues. Ha ha ha ha ha! Yeah right. That would only be the case if they were dealing with machines, not people. People are infinately variable and are motivated by a huge variety of factors. People have changing circumstances, which can sometimes mean they don't live up to their own standards, and may not leave a tenancy as they intended to. Another reason a property manager could boast such is they have so few properties they don't get much experience at all. Or they try to stay out of Tribunal as they know their own actions would not withstand scrutiny. Or, they failed to collect sufficent evidence to prove their case.
We're not afraid of such things. We know our processes and behaviours are robust. We know we have the evidence we need to prove our case. If tenants don't fulfil their obligations, we are not afraid to do what we need to in order to protect our clients.
We do go to Tribunal. It is more often than we would like. But it is not more often than our clients like.

How to check references

We think we are pretty good at reference checking prospective tenants. I know we are, because we guarantee it. If we were no good, it would cost us too much to do such a thing. So, what do you need to know about reference checking?

1. Do it. The quick look up and down and judging a person by their handshake just doesn't cut it. Do call their referees and ask about them. Be suspicious if they don't give you any details, or have no one they can offer, or phone numbers are all wrong. They won't have been born yesterday, so don't act like you were. Everyone has a history, insist on delving into it.

2. Qualify the referees. How much weight should you attribute to different referees? They are not created equally. I'd attach more importance to what their landlord and employer have to say about them than their dear old Aunt.

3. Know what information you can get on-line about someone, and if there is any restrictions on using that information. For instance, know how to look up their Tenancy Tribunal history. Know how to do a credit check (and make sure you have consent to do so, or you may never be allowed to do another one again). Is Googling them useful?

4. Have some good questions to ask referees, and know how to verify information. Perhaps you ask the same question in different ways. Or keep the questions open-ended.

5. Do ask questions of the referees to verify they are really who they say they are 'so, how long have you owned the property? Have you seen much increase in value for you during this time? Why did you decide to buy it? - all these can be asked of 'landlords' to check they really own the property. Pretenders will soon fall flat on their face).

6. Watch for inconsistencies. Don't try to explain away anything that is contradictory. Find out the real story by asking them about it. E.g. 'You said on your application you don't smoke, but one of your referees said you do - can you explain please?'.

7. Listen to your gut, as well as your ears. Do you sense hesitancy? Holding back? Outright lying? Warning Will Robinson! Either ask them about it, or choose someone else.

Reference checking too subtle an art for you? To confrontational for you? If so, get someone else to do it, like the team at Rental Results Property Management. We pride ourselves on our tenant selection.

It’s not just what you know, it’s who you know.

Very few landlords contact previous landlords of a prospective tenant to get references. While I think that is a more than a bit foolhardy, I know some landlords will just say nice things to get them out of their property, especially if it is not true. I was reminded of this recently while doing one of our background checks on a prospective tenant. The landlord was someone I knew, so for his protection, let’s call him ‘M’. The call went something like this:

“Hi M, how you doing? It’s Jackie here, I’m ringing because (tenant) has applied to rent a property from me. He’s a tenant of yours right now?”

“Oh hey Jackie, how’s it going? I thought (tenant) was looking around. He’s asked me for another place in my properties, but I’ve refused. He’s really grotty, our housekeeping team refuses to go into that apartment. He’s late with his rent and needs to be reminded, and he’s never set up an AP, although we’ve asked him to. I wouldn’t recommend him at all.” M spurted.

“Really, that’s a pity. Thanks for being so honest with me” I say.

“No worries. If you were anyone else, I’d give you the ‘yeah, their fine’ spiel, but because I know you… I wouldn’t do that to you”.

So, it pays to be well connected, you’ll get more honesty from other landlords. I’d like to say this was the first time I ever encountered such a thing, but it happens all the time. If you are a landlord, the best protection against bad tenants is to be well connected and do background checks.

To develop connections with other landlords, join a property investors association like Wellington Property Investors' Association http://www.wnpia.co.nz. If you don't know what background checks to do, research it on http://www.dbh.govt.nz or get property management from a company like Rental Results http://www.rentalresults.co.nz - our tenant selection is so good, we guarantee it.

No One Complains About You.

Over a few drinks recently, one of our regular tradespeople remarked to me "You know Jackie, I work with lots of property management companies all over Wellington".
"Yes, I know" said I, wondering where this was going.
"Do you know, when I'm at your properties, I never hear the tenants complain? I never have neighbours come up to me and tell me how bad your tenants are".
"Really? Surely that isn't unusual" I said.
"No," he said "It's very unusual. I always have other peoples tenants complain to me about their property managers. Never about Rental Results".
Hugely flattered, I turned to another Tradie in the room from a different industry and asked him if that was his experience.
He thought for a moment, and said "He's right. I've never had any complaints about you guys. Plenty about the other buggers, but none about Rental Results. When I pull up outside a property in my van, neighbours will come out and tell me what the tenants are getting up to, but not for your properties".
Now, it wasn't just that it was my shout for the drinks. These guys were genuine. And I have no reason to doubt them as we have very few tenant complaints to us directly either.
We manage to walk the line of looking after landlords interests at the same time as meeting tenants expectations for good customer service. That isn't an accident, it is something we set out to do each time we meet a prospective tenant. We have tenants remark to us that 'we have never had a property manager show so much interest in us and what we wanted before'. It carries on through the tenancy and we have a good record of getting back properties in good condition as the tenants care that we care.