Hi all
Have a problem with my tenants who up until now have been great people, looked after my IP very well, but have ALWAYS been behind on the rent. They have a large family and are self employed and get paid for their work in irregular patterns, hence sometimes they can be 8-10 weeks behind. Some people will think that is ludicrous but they really helped me out when i bought the place by recommending tradies, fixing problems around the house, installing new carpet and even installing a new kitchen for no charge (i purchased kitchen for them).
It has got to the stage where the rent is promised next week and I suspect they have fallen on hard times, maybe lost some clients. But the mortgage still falls on me and to make things worse I self manage (due to tough circumstances when i bought the place) but we have a signed NSW tenancy contract in place.
Are there any recommendations or advice i could fall on here. I'm thinking of flicking it over to a PM and give them all the paper work and payment updates, but I also don't want to alienate my tenants, who up until now have been great and could just be in rough path. I texted them the other day with no response, will try calling this week.
Regards
Ian
Hi Bricman,
The old saying, "no friends in business" comes to mind. First thing to consider is that you are not their overdraft facility, are they taking advantage of your generosity, and are you feeling guilty for what they have done for you in the past, and has their input been noted financially for work done on the improvements for the kitchen?
I always say to our clients "Are you a property manager?, if not employ one so that the law can be applied when needed, insurances such as Landlord Insurance can be claimed as the correct process has implemented by the Property Manager.
At the moment you are how much in the red due to loss of rent, interest cost and stress? I strongly suggest that you remove yourself from the relationship and hand it to a Property Manager, when you add up the cost of a PM and your loss, the numbers will stack up.
Hope this helps, no emotion, be analytical and address the numbers in your business, which is your P+ Property Portfolio.
Cheers
Grant
bricman wrote:Hi allHave a problem with my tenants who up until now have been great people, looked after my IP very well, but have ALWAYS been behind on the rent. They have a large family and are self employed and get paid for their work in irregular patterns, hence sometimes they can be 8-10 weeks behind.
Hi Ian
It's time to treat it as a business. That sort of delay in rent payments is totally unacceptable. It's normal to empathise with people – but they are going to start dragging you down too. At the end of the day, you're the one responsible for making the repayments on the property.
Hand it over to a PM and have no involvement in the management of the property is my advice.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Ian yeah its tough choice Ive been in a similar spot but with a PM. Great tenant for 3 years always ahead in rent and than lost his job. I did the wrong thing by letting him have a few weeks off until he got on his feet. A few weeks turned to months he is only just catching up now that he has a job but the rent should have gone up a few months back which we cant do until he isn't in arrears anymore. Do you have landlord insurance?
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
Tenants tend to take advantage of owners. I think everyone has said it all. Go with a PM. Sounds like the attempt to save money in the beginning could end up costing you a lot in the end. Its a real shame they have turned a corner for the worse. A horrible position to be in.
Be very careful also of tenants helping you out such as putting in the kitchen. Its a huge risk. Not only could they do a dodgy job but if they hurt themselves in the process you could be up for liability for damages. They also tend to use it against you at the end of tenancy.
Good luck I hope you get it sorted quickly.
Hi all
Appreciate the responses. Have been thinking of a PM for a while now, as usual there is always something getting in the way (me).
I just found out they have been very sick and have been unable to work (so I've been told). Previously they paid in 4 week blocks to get back to square, but all to in-frequent and late.
Don't have LL insurance just building insurance, I should check my policy as it is with GIO who seem to have good coverage…
Been promised some funds next week by tenant, then will actively seek a PM and hand it over.
Been looking to sell for a while, not because of this but the so called up-coming boom, cash out and make better use of my investment capital elsewhere.
So having a PM manage the last 6 months or so before selling could be very useful!!
All part of being a landlord!
PS Good point made grant, how much stress or guilt has it caused. That is a non financial question that often gets missed.
Hi posters
Just an update to my tenant problem. Called an agent that I know and respect last week and got the ball rolling on getting a PM in place
for my IP.
EVERYONE gave me the same advice and have finally taken the appropriate steps, should get the paper work through by next week. Detaching myself from
the situation as best i can! never intended to self-manage in the first place, just happened. Will NOT do the same mistake again.
Cheers
Ian
Good move Ian – keep us posted on how it all pans out.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Our favourite PM's nick name is 'The Terminator'. Boy is she tough but straight down the line. I wish we could clone her
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Use the Pm – leverage their time and it is worth every penny. Good to see they are taking it on at this late stage too.
Don Nicolussi | Mortgage Broker - Home Loan Warehouse
http://homeloanwarehouse.com.au
Email Me | Phone Me"I think of finance as a technology, a way of getting things done." Robert Shiller
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