Nightmare Tenants: Why is Tenant Screening Important?

Everyone has heard nightmarish tales of bad landlords. But what about nightmare tenants?

Today, there are more people renting for longer periods than ever before. As property prices continue to rise, fewer people can afford to buy, which creates a large pool of long-term renters.

With more people renting for longer periods, it’s inevitable that landlords and property managers will encounter more problem tenants.

Thorough and proper tenant screening helps to stamp out problem tenants.

Avoiding Nightmare Tenants

Take Landlord A, for example, husband and wife investors. They liked the sound of Tenant A until they realised the tenant hoped to lease the property for his second wife, who had not yet been granted a Visa into the country.

Landlord B is a long-time investor with multiple properties. He rescinded Tenant B’s application only when he learned the tenant’s plan to advertise the other bedroom as short-term rental accommodation.

And Landlord C, based interstate, rejected Tenant C once their employment history and financial statements showed they couldn’t pay the rent.

Luckily, these landlords averted potentially nightmare tenant problems because they used the expert guidance of a qualified property manager.

While the Rental Application form gives the landlord some indication of whether the applicant is a worthy choice, it doesn’t tell the whole story. Stringent tenant screening and reference checking are the best defences against a nightmare tenant.

In the case of the above examples, the property manager’s thorough tenant screening process tells the rest of the story:

  • Tenant A – an in-person interview with the applicant quickly uncovered his true intentions.
  • Tenant B – previous rental history revealed prior evictions for similar conduct.
  • Tenant C – a quick call with current and previous employer’s and a review of recent bills and statement showed the applicant couldn’t afford the rent.

Professional tenant screening can save landlords untold anguish, both emotional and financial. Appoint an experienced property manager to ensure you avoid nightmare tenants and find the right tenant for your property.


Prepare now for new residential tenancy laws

The NSW Parliament recently passed a number of amendments to the Residential Tenancies Act 2010. With over 30% of the NSW population renting, these changes are designed to make it easier for tenants to make a rental property feel like home.

For landlords, it creates an opportunity to attract and retain high quality, long term tenants – providing greater income certainty on their investments.

The new laws also improve protections for victims of domestic violence.

The implementation date for the Residential Tenancies Amendment (Review) Bill 2018, is expected to begin in the first half of 2020 so it’s important all landlords start planning now.

The Reforms in summary

A. Minimum standards identified

At the beginning of any tenancy, all properties will need to meet 7 minimum standards to be deemed fit for habitation. These standards will also need to be maintained throughout the tenancy (by way of repairs). While not an exhaustive list, these standards are considered the minimum baseline.

The 7 minimum standards are:

  1. The property must be structurally sound
  2. Each room must have adequate natural or artificial lighting (the exceptions are storage rooms or garages)
  3. There must be adequate ventilation throughout the property
  4. It must have an electricity and/or gas supply with adequate electricity and gas outlets for lighting, heating and appliances
  5. The property must have bathroom facilities (including toilet and bathing facilities) which provide user privacy
  6. The property must be connected to water supply infrastructure for the supply of hot and cold water for drinking, washing and cleaning
  7. The plumbing and drainage must be satisfactory

B. New resolution powers & rectification orders

The property management industry is plagued by disputes over repairs and maintenance issues along with claims of property damage caused by tenants. The new legislation is designed to reduce these problems by providing NSW Fair Trading with greater powers – including the ability to issue rectification orders.

C. Rent increases limited for periodic leases

Rent increases for periodic leases (that is, where the tenancy has no specified time limit) will be restricted to once every 12 months under the new laws.

D. Protections for victims of domestic violence

Tenants who need to escape a violent partner will be able to terminate their tenancy immediately and without penalty. In addition:

  • The victim/s will not be held accountable for any property damage that occurred during a domestic violence incident
  • The same is true if they are a co-tenant who is not the perpetrator
  • If a tenant terminates a lease because they are a victim of domestic violence, the landlord or their agent are prohibited from adding their name to the tenancy database

E. Separate meters for granny flats etc.

With the rise of dual occupancies, granny flats and the like, the Residential Tenancy Amendments include a new definition for “separately metered premises”. The purpose of this amendment is to reduce the number of disputes between landlords and tenants over who pays for water, electricity and gas.

F. Other changes

The amendments are quite comprehensive and include a number of other changes including:

  • The introduction of penalties for landlords or agents if they fail to provide the tenant with a property condition report at the beginning of the tenancy
  • Mandatory set fees for breaking a fixed-term lease
  • Penalties for landlords who fail to repair smoke alarms
  • Clarification on taking photos and videos during inspections and publishing them to advertise the property for re-lease or sale
  • Stopping database operators charging tenants to access their own information

Take care of your tenants and they’ll take care of your property

Your investment property is a valuable asset so it’s only natural you want to ensure it’s providing a great return on investment, with tenants that will take care of it.

This new legislation is designed to help you do that by providing tighter guidelines on what’s acceptable from both a landlord’s and tenant’s point of view.

For an informed and conscientious property manager to look after your investment needs, call Brigitte Stills on 1300 091 638 or email propertymanager@stillsproperties.com.au She’s been looking after landlords and their properties for over 30 years.


Is Your Tenant Illegally Subletting Your Investment?

The number of Australian’s renting is officially on the rise. While this is great news for residential property investors, it’s not the only thing heading north.

In recent years, tenants who are illegally subletting to strangers, especially tourists and holiday-makers has increased at an alarming rate, leaving the property owners exposed to a range of risks and costly consequences.

Continue reading…


How to secure the right tenant for your investment?

Would you let a stranger into your house? Accepting tenants without adequately screening applicants is akin to allowing a stranger into your house, and handing over the keys. No doubt, a costly decision in any property owner’s book.

While finding a tenant for your rental property is about marketing your property to the right demographic, securing the right tenant for your investment is about thorough tenant screening and reference checking.

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How to find a tenant for your rental property?

Before you start the journey to find a tenant, you first need a strategy – a marketing strategy.

Like any product new to the market, to find a tenant for your rental property you need to determine what you are offering, who is your ideal customer and how you want to package your offering?

When residential vacancy rates are low (around 1% – 2%), your product is most likely in high demand, but higher vacancy rates (over 3%) signify low rental demand, which means you may need to work harder to attract the right customer.

Continue reading…