Tips on How to Build a Strong Relationship With Your Tenants
A happy tenant often means a happy landlord.
When a landlord has a good relationship with their tenant, issues such as late or no payment of rent and property damage may be minimal.
While this is obviously beneficial to the landlord’s property management, developing and maintaining a good relationship requires some work. It won’t be achieved by putting tenants into a property and then forgetting about them. Nor will it be developed by micro-managing and constantly checking on the tenants while they are trying to get on with their lives.
There are five key things to consider when developing and maintaining good relationships between landlords and tenants.
• Attend to maintenance issues promptly
For tenants, how quickly a landlord attends to maintenance issues can be an indication of how the landlord views the relationship and how they value the tenant. Landlords who act promptly and keep their tenants informed of progress show that they care.
Responding quickly to issues that affect a tenant’s enjoyment of the property, such as broken water heaters, stoves or air conditioners, blocked drains or rainwater damage, is vital. It may take a few days for a tradesperson to undertake the repairs or replace a broken unit, but if the tenant knows that action was taken as soon as the issue was reported and they are kept informed of progress, it may help to ease stress levels.
A follow-up call a few days after the repairs are made, or a replacement unit is installed also helps develop trust. Delaying repairs or maintenance can open a landlord up to a legal liability claim if a tenant or their guest is injured as a result. It may also send the wrong message to tenants.
• Undertake regular inspections
Regular inspections are essential to ensure the tenant is looking after the property, and there may be requirements for inspections in your rental agreement or at law. It’s also an opportunity for a tenant to point out any maintenance issues which the landlord needs to address. Regular inspections show the tenant that the landlord takes an active interest in the condition of their property and helps reinforce the requirements under which the tenant has leased their property.
• Maintain positive relationships with tenants
Maintaining a positive relationship with your tenant can help to ensure that they remain cooperative throughout their lease agreement.
Listening and carefully considering requests for changes to lease conditions and responding quickly to queries or concerns helps build rapport.
Requests to change lease conditions should be carefully considered, and if rejected, sound reasons should be provided in writing. There may be specific requirements about dealing with requests in your rental agreement or at law. Where routine maintenance needs to be undertaken, working with the tenant to determine the best time for the work to be conducted is also good practice.
• Consider the tenant’s needs
If you’re looking to sell your rental property, your tenant’s lease should be a priority. Changes to the ownership of a rental house or unit can be a time of stress for a tenant as it may destabilize their life and makes their future less certain.
Give the tenant as much notice as possible that a property is going onto the market and work with them to determine the best way to go forward. If open inspections are required, give tenants as much notice as possible. Landlords may be entitled to raise the rent of their properties periodically, and you should check your rental agreement.
No tenant wants to pay more rent, however, it is sometimes necessary to implement rental increases to cover the rising costs of maintaining a property. Letting tenants know about a rental increase should take place in a timely fashion and in accordance with your rental agreement and other laws, not left until just before the lease expires. If a tenant knows in advance that a rate rise is coming and the reasons behind it are justified, they may be more inclined to stay.
- Be realistic
Even the most careful of tenants can damage a property. Accidents happen, and if a tenant has a good track record, there is nothing to be gained by adopting an unreasonable approach.
Landlords should consider having tailored landlord insurance in place in the event of the unforeseen. This may cover them for both malicious and accidental damage, although if the landlord has a good relationship with the tenant, the chance of malicious damage may be significantly lessened.
5 things that can damage a landlord-tenant relationship
With property one of Australia’s top investment choices, more and more people are finding themselves taking on a landlord’s position.
But the landlord/tenant relationship can be a tricky one to manage. If both sides neglect their duties and obligations, the relationship can quickly turn sour and, if an issue can’t be resolved amicably, disputes can go all the way to court.
Here are some potential lemons that can sour a good working relationship between a landlord and tenant.
Good communication is key to resolving any issues quickly and peaceably between landlords and tenants. But communication is a two-way street, so if one party is prone to angry phone messages or not responding at all it can be incredibly difficult for a tenant to get things repaired, or for a landlord to get their overdue rent paid.
There are always two sides to every story, so listen calmly to what the other person has to say and be polite.
Lack of mutual respect
When a tenant signs a lease to rent a property, it’s their responsibility to treat it with respect.
That means taking care of it, cleaning it, keeping it tidy and informing the landlord if anything is broken. Tenants who mistreat a property aren’t going to be looked on favourably by a landlord and may lose their bond at the end of the lease or be evicted early.
Likewise, a landlord needs to respect a tenant’s rights when conducting inspections and adequate notice needs to be given to enter the property. Tenants have the right to refuse entry to a landlord who shows up unannounced.
A tenant who is constantly on the phone to their landlord complaining about every tiny issue will soon be put on the backburner. When something really does go wrong, the landlord may be slow to respond as they’re not sure how ‘urgent’ it is.
Tenants should only call their landlord if something needs be to fixed or repaired.
Likewise, landlords need to organise repairs in a timely manner if there is something broken. ‘Leaving it’ won’t endear you to your tenant and is a failure of the duty of care set out in the tenancy agreement.
Tenants are only human, so if they do accidentally break something, have a gathering that’s a bit too loud or miss a rent payment, give them a chance to redeem themselves.
But don’t be a walkover either. Some tenants like to push the boundaries to see what they can get away with, and if you’re too nice you’re the one that will end up out of pocket.
Calmly but firmly remind them of their responsibilities as tenants and how a series of missed rent payments or being a nuisance to neighbours can get them evicted.
Not keeping promises
Trust is an important ingredient in the landlord/tenant relationship. So if you say you’re going to do something, then keep your promise – this applies to both parties.
For landlords, this can be organising a repair or extending a lease. For tenants, it can be agreeing to pay for accidental damage or keeping the noise down. If you’re unable to fulfil a promise, talk to the other party and develop an alternative solution.
Alternatively, if something cannot be done immediately, but you’re working on it and communicating this, it will go some way to keeping everybody happy. Once trust is broken, it can be challenging to get anything done, and situations can drag on endlessly.
Dealing with Bad Tenants
We’ve all heard horror stories about landlords who have been cursed with terrible tenants. They fail to pay the rent, turn a previously immaculate house into a squalid dump and trash the place before leaving.
Unfortunately, bad tenants come in all shapes and sizes and are a risk every property investor needs to consider before purchasing real estate. While they are not always as bad as the nightmare tenants mentioned above, they can still cause you many hassle and heartache.
Let’s take a look at the common problems bad tenants cause, how you can solve tenancy problems as quickly as possible and ways to avoid getting stuck with bad tenants in the future.
Common problems caused by bad tenants
No matter how rigorously you screen potential tenants, it’s still possible to end up with renters who continually cause you stress. Some of the most common issues include:
- Failing to pay the rent. From missing the occasional payment to systematically dodging their obligations, bad tenants can leave you significantly out of pocket.
- Causing damage. If a tenant doesn’t take proper care of your rental property, you could be left with repair bills worth thousands of dollars.
- Conducting criminal activity. Whether it’s selling stolen goods, running a drug lab or anything in between, tenants conducting criminal activity out of your rental property can have disastrous consequences.
Other issues caused by problem tenants can also be an unnecessary hassle. For example, you might have a tenant who constantly complains, regardless of whether or not there are legitimate concerns you can address. From complaints about noisy neighbours to unreasonable demands for upgrades to the rental property, dealing with such tenants can be time-consuming and stressful.
Dealing with difficult tenants
Here are five things you can do that can help make the process of dealing with difficult tenants as smooth as possible, and prevent minor disagreements from escalating into a serious headache:
- Assess the situation. High tenant turnover is never a good thing for a property investor, so letting a tenant out of their lease or evicting them should be a last resort. Instead, take stock of the situation and determine whether there is an easy solution that will keep you and the tenant happy.
- Take emotion out of the equation. When it comes to investing, you should never let your heart rule your head. Sometimes the best thing you can do is take a step back and examine things rationally rather than letting your emotions get the better of you. Keep your cool and discuss any issues calmly and frankly.
- Communicate. Working to build a good relationship with your tenants can save you a lot of stress in the short- and long-term. You might also be surprised at how many issues can be solved by simply talking to a tenant, listening to their problems and showing that you are willing to try and find the best solution.
- Know when to stand firm and when to compromise. Sometimes you just need to trust your gut and decide when a tenant is taking you for a ride and when they have an honest problem. For example, if a previously reliable tenant struggles to pay the rent, perhaps they’re experiencing short-term financial problems after being made redundant. In this case, giving them time to get their finances in order can work out to be much better in the long run than immediately getting the eviction ball rolling.
- Use the rental agreement to back up your arguments. The tenancy agreement contains details of a tenant’s rights and responsibilities, so make sure to refer to it if you ever need any support for your requests. There’s also some useful information on some of the terms and conditions you should include in the agreement later in this article.
What you can do
Know your rights
Before you buy your first investment property, make sure you’re fully aware of your rights and responsibilities as a landlord as well as the rights of your tenants. Tenancy laws vary between Australian states and territories, so check the relevant Residential Tenancies Act for information on things like:
- Notifying a tenant that they have breached the rental agreement
- How long the tenant has to fix the breach; and
- How you can terminate a tenancy if a breach is not fixed
Doing research before there’s a problem will ensure that you are well placed to act if difficulties develop.
Getting the right agreement
To make sure that you have the legal high ground if problems arise with your tenants, there are several terms and conditions you should consider including in the tenancy agreement. These include:
- The rental amount and when it must be paid
- The tenants’ responsibility to inform you of any maintenance issues and to pay for any damage they cause
- The number of tenants that are allowed to live in the property
Including these conditions in the agreement will prove helpful if you ever need to issue a breach notice.
Issuing a breach notice
If a tenant breaches the terms of the tenancy agreement, you should issue a breach notice as soon as possible. This is a crucial legal step you need to take if you later decide that you want to have the tenants evicted. The laws in each state and territory provide guidelines on how to issue a breach notice, and the time frame the tenants have to remedy any breach. If any problem hasn’t been rectified when this period ends, you can issue a notice of termination.
Issuing a notice of termination
The exact process and time frames concerning termination notices also vary from state to state. For example, in NSW tenants must be given a minimum of 14 days to vacate after being issued a termination notice, while in Western Australia the minimum is seven days.
What to do if your tenant refuses to leave
Suppose the tenant fails to adhere to the notice and vacate your property. In that case, you’ll need to follow the applicable legal steps in your state or territory to regain possession of your property legally. This usually involves obtaining an order to vacate from the relevant tribunal. Your tenant will be given a set period of time in which to vacate, after which law enforcement can forcibly remove them. The exact process varies from state to state.
If the tenant refuses to leave by the specified date, you will have six months to apply for a writ of possession from the Supreme Court. This will allow the sheriff’s office to evict the tenant from the property.
Make sure you have landlord’s insurance.
Last but not least, make sure you have an adequate level of landlord insurance cover in place. Not only will this protect your building and contents against fire, storm and other damage, but it can also provide cover for malicious damage by tenants and lost rental income when your tenants fail to pay the rent.
How to find the right tenants
- Find a good property manager. If you’re not an experienced property investor, enlisting the services of an experienced property manager, you can trust will improve your chances of getting a reliable tenant. Your property manager will know what to look for in a tenant and any ‘red flags’ that signify applicants to avoid.
- Think about the tenants you want to attract. If you want to attract tenants from a specific demographic, keep this in mind when choosing an investment property. Also remember that the way you present your property will have an influence on the way the tenants treat it, so an immaculately presented property has a better chance of attracting great tenants.
- Use a database. There are multiple tenancy databases that collate lists of bad tenants and provide a useful resource for real estate agents and landlords when screening tenancy applications. These sites, such as the National Tenancy Database, list bad renters whose tenancy has ended and whose rent is in arrears by an amount more considerable than their security deposit or who have breached their tenancy agreement.
- Screen tenants. Check the references of potential tenants and even consider credit checks to determine whether an applicant will be able to pay the rent. Even if a potential tenant passes every test with flying colours, if you’re still unsure about their suitability, trust your gut instinct and walk away.
- Stay in regular contact. Communicating with tenants regularly is one of the best things you can do to prevent any problems arising. That way, you can stay on top of any maintenance or repairs problems, and by making yourself easy to approach and deal with, you’ll hopefully be able to develop a good relationship with your tenants.
- Conduct regular inspections. Check the laws in your state or territory to determine how often you can inspect a property you own. Exercising your rights for regular inspections will help you learn of any problems as quickly as possible, such as damage to the property or too many tenants living there.
Finally, it’s worth remembering that the majority of tenants are reliable, honest people, so don’t let one bad experience ruin the way you deal with all future tenants. Take a few simple steps to maximise your chances of finding a good tenant and if problems do arise, make sure you have a plan for dealing with them.
- If the tenant does not leave by the specified date, you will need to get a warrant of possession from the tribunal, and a sheriff’s officer will remove the tenant from the property.
- If the tenant does not vacate by the specified date, you will have 30 days to apply for an order of possession instructing the tenant to leave by a specific date. If the tenant does not leave by this date, you can obtain a warrant of possession that will allow police to evict the tenant from the property.
- If the tenant fails to vacate by the specified date, you will need to apply to the tribunal for a termination order and warrant of possession. This allows the police to remove the tenant from the property.
- If the tenant has not vacated by the specified date, you will have 30 days to apply to the Magistrates Court for an order of possession. If the tenant still fails to vacate, you can apply for a property seizure order, and a court bailiff will remove the tenant from the property.
- If the tenant does not vacate within the specified time, you must apply to the tribunal for an eviction notice and request for possession. A bailiff will evict the tenant.
- If the tenant refuses to leave by the specified date, you can apply to the tribunal for a termination and possession order. If the tenant still refuses to leave, you can apply for a warrant of eviction, allowing police to remove the tenant from the property.
- If the tenant fails to leave by the specified date, you can apply to the Magistrates Court for an order of possession. An officer of the court will remove the tenant from the property.