APIA Blog

RSS Feed

10 warning signs of a bad tenant

Wednesday, November 26, 2014

Because appearances can be deceptive and landlords risk being taken for a ride, here are some warning signs of a bad tenant to watch out for: 

  1. The friend - Pay attention to the old adage that you should never do business with family or friends.  Your friend is not automatically a bad tenant, he is just a bad tenant for you.  Residential tenancy is a business and during the normal course of doing business, you will disagree from time to time.  When that happens it is easier for you to maintain your professionalism as a landlord if you do not have to worry about ruining a friendship. 
  2. The credit-check-maybes - You know that tick box at the end of the tenancy application form authorising you to carry out a credit check on the tenant applicant?  Ever noticed the ones who start dithering about when they come to that box?  Or the ones who ask you if a credit check is mandatory?  If a tenant applicant is awkward about a credit check, chances are they have something to hide.  "I usually ask them straight up - If I credit check you will I find something that will cause concern?" says Andrew Bruce, President of the Auckland Property Investors' Association.  "Normally the first reaction tells me everything I need to know."  
  3. The bond negotiators - Considering the process of bond lodgement is tightly regulated by the Residential Tenancies Act (that no more than 4 weeks' rent can be collected unless otherwise agreed), and you have a tenant applicant who tries to negotiate you down, you really have to wonder about the size of his cash reserve. 
  4. Cash payers - Be wary of cash payers, especially those who pay you rent in cash upfront for an extensive period of time.  The two worst-case-scenario reasons for landlords are: 1). That the tenant has such bad rental history, she is offering you the cash as a diversion. and 2). That your property is being rented for the purpose of carrying out some form of illegal activity and that by paying you cash you tenant is hoping to not be disturbed by you.  
  5. Frequent movers - Make a point of asking for a reason for frequent relocations especially when a tenant has had multiple addresses in the same general area.  
  6. Parent/close friend referees - While there is no legal impediment for a parent or a close friend to act as a tenant applicant's referee, be wary of the references you do get from these referees.  Take a strategic approach to making reference calls and ask questions that will give you relevant information on the applicant.  Examples include: Would you go guarantor for this applicant?  When was the last time you spoke to them?  Can I confirm her phone number with you? 
  7. The hobos - I am not saying that tenants have to be in designer threads in order to be worthy of your property but do take of note of an applicant's general appearance, hygiene habits, the state of their cars, and their punctuality.  A tardy applicant who comes across as dishevelled and unkempt can hardly give you confidence that they would treat your property with respect.  
  8. The speedy gonzales - Don't cut your application process short just because a tenant applicant is in a massive hurry to move in.  Responsible tenants respect advertised move-in dates and those who do not may have ulterior motives.
  9. The drunk - Watch out for breaths that stink of alcohol, dilated pupils, slurred speech, delayed or intermittent response to your questions.  You wouldn't hand over wads of cash to a drug addict, so why would you let her move into your property?
  10. The something-is-up-but-I-can't-put-my-finger-on-it - Finally, always trust your instincts.  If a person is  not inspiring any confidence and giving you bad vibes, politely end the application process and move on.  By signing the tenancy agreement, your tenant is entitled to exclusive possession of your property.  Don't ever leave it in the hands of someone you cannot trust completely.  Be aware of human right and anti-discriminatory laws.  Get into the habit of saying to unsuccessful applicants, 'I am sorry but you are not the best applicant by merit.' and nothing else.  

These signs are general and by no means absolute.  In many cases there may be perfectly innocent explanations but if you take your responsibility and profitability as a landlord seriously, it should at least be incumbent on you to make necessary enquiries before entering into the tenancy agreement. 




Recent Posts


Tags

market rent Editor's Choice rta reform buying capital gain sublease holiday house structure trespass house prices auckland housing affordability inspection initio rta gluckman report market parry v inglis positive cash flow data security short-term rental property maintenance letting fee investment strategy buying rules tenancy services cgt cat legal relationship wins tenant robert kiyosaki Sponsored post airbnb tax smoke alarm reserve bank trust boarding house principal and interest heating sale and purchase investor CoreLogic meth contamination anz warren buffett buyer's agent watercare rent Holler Standards New Zealand cash-flow clnz rent increase minor dwelling Tribunal case study maintenance building bond LIM government shower dome lvr renovation Kris Pedersen Mortgages and Insurance trademe rental market income property value Guest blog first home buying television warm up new zealand heater tenancy tribunal Question and answer property fixed-term tenancy HHGA rent arrears twg report nzpif worksafe HHS bad tenant return debt enforcement ocr wealth creation interest only letting auckland council advice election 2017 business water bill insurance TCIT winz ring-fencing property cycle productivity personal growth damage Investor story partners insulation unitary plan Investment tip negotiation bond form Q&A How to scotney williams Landlording subdivision mortgage ask an expert Jeff Bezos banking development asbestos extractor fan privacy landlord CCC Must know ventilation finance management ird HSWA Must knows financial advisers act rental wof DTI tenancy issues equity skill shortage housing bubble education property management p lab RTAA 2019 Market report Property (Relationships) Act interest rates sale and purchas off the plan speculator beginner investor

Archive

Introducing Our Partners
Principal Sponsor - Kris Pedersen Mortgages & Insurance logo Gold Sponsor - Barfoot & Thompson logo Gold Sponsor - CoreLogic logo Property Apprentice logo Keith Hay Homes logo The Insulation Warehouse logo The Renovation Team logo The New Zealand Property Investors' Federation logo
09 360 2376
info@apia.org.nz

The Tenancy Practice Service and TPS Credit Control work closely with the Auckland Property Investors' Association. Our vision of bringing helpful resources, documents and high quality services to Auckland Property Investors and Property Managers is shared by APIA, so its a partnership that works well. 

The Auckland Property Investors' Association is a great organisation for those who want access to advice and information from a range of industry experts and partners. 



Mathieu Holt- Managing Director, The Tenancy Practice Service & TPS Credit Control
Through the Association I found the channels and methods to fund the purchase of property I never dreamed about. Grant Brown

All round it has been one of those things Neil and I felt was really worthwhile belonging to. We have learned so much it has just built our confidence in what we are doing.

Janice Bieleski
I read two articles in the monthly magazine that saved me over $5,000. That is my membership fee for the next 26 years and I am sure I will learn a whole lot more! John Duncan
Fantastic organisation. The networking opportunities are brilliant and provide us with information and opportunities that cannot be obtained anywhere else. We learn something new at every meeting and we've been in this game for nearly 20 years. Pauline and Gyanen Kumar

I find the information obtained from various APIA meetings very useful in guiding my own property investment and rental management.  I also enjoy the networking opportunities with like-minded investors.  I am inspired by other investors’ success and find the more experiences and knowledge that I share with others, the more confident I become.  

Thanks to all APIA event organizers and administrators for your brilliant work. 

Stella Shao

I like talking to people and learning from their experience because it gives me the confidence to invest well. I think it is a knowledge thing. I now know I am doing things the right way.

Stephen Weatherall

My APIA membership has become a total success.

Every time I attend a monthly or regional meeting I come away with so many useful and positive tips that have added value to my property investments and management.

Not only that, the website is a great place for practical advice and useful information. It has now evolved into an important resource for my business.

Talk about value for money! The discounts I have been getting at Bunnings when I present my APIA membership card have more than paid for my annual subscription!

Tim Duffett, Plan A Investments Limited