problems with the tenants

[yadeh]

Hi guys

I have got a problem with the tenants. This ia actually why I do not dare to go ahead and buy more than one investment propety which I have now!

The tenants in this property are refugees whose rent is paid by centerlink. Why did I take an unemployed tenant? It was the real state agent's suggestion that the rent is guaranteed by the centerlink, and so on.
Now, apparantly, they can not afford to pay the rent for some reason and they have not paid it for three fortnights. The property manager is cool about this and takes it slowely. My questions are

1. should I leave it to the propety manager to solve the issue, or should I act my self? If so, where should I start from?
2. Can I claim this rent from my Landlord Insurance?
Thank you all,

Yadeh

[wish-ga]

If the PM is not acting according to your wishes investigate getting another PM. I wouldn't dally on that one. The longer it goes on the more you will be out of pocket. The current PM doesn't seem to care as it isn't affecting their cashflow and also chasing up would mean more work for them.

I would find a PM that will work with you a bit better. And I would be very up front with the current REA as to why you are taking the business from them. Not just the pm but the REA/owner of the business.

After all the pm may not own the business. And if the REA is losing business because of a lax pm then they would want to know about it (at least I would if I was an rea. Prop Mgt is an ongoing income for them regardless of the sales on their books, they should pay careful attention to it in my opinion)

I wouldn't take an unemployed tenant again if I had been burned. It is a bit of a bad experience but at least it helps narrow down the action to next take for a better result.

All the best!

[wish-ga]

Hi guys

The tenants in this property are refugees whose rent is paid by centerlink. Why did I take an unemployed tenant? It was the real state agent's suggestion that the rent is guaranteed by the centerlink, and so on.
Now, apparantly, they can not afford to pay the rent for some reason and they have not paid it for three fortnights.

Yadeh
I have a bit of trouble with this. Seems to be some conflict there. On one hand Centrelink pays the rent but on the other hand the tenant can't afford the rent.

So which is it?.... a) Centrelink pays
b) Centrelink pays the people some money and the assumption is that they will manage the money and give you some rent.

a) and b) are two diff things.

If the money is supposed to come directly from Centrelink into your account then there should be no problem. But if (as I suspect) the tentant has to budget their payouts it is going to be difficult to get the money.

I would NOT let it go any further. I would get a new PM and ask them to serve notice on the tenants, part of pms job is to represent you in tribunals etc. I would be up front with the new pms about the situation though.

[grubar30]

I have got a problem with the tenants. This ia actually why I do not dare to go ahead and buy more than one investment propety which I have now!and your going to let one bad tenant stand in the way of your financial freedom....oh my!

You need to start seeing the forest for the trees.

[paulandlou]

Good morning Yadeh,

I actually work for Centrelink - this is job I am trying to get away from by buying more property.

Customers who are paid one of the many benefits by Centrelink can access an item called Centrepay where money for their regular bills is paid directly from their payments. So it seems that the PM has organised this so that the money comes straight out of their payments when they are paid. However, the customer can cancel this arrangement at any time by phoning Centrelink, there is also the risk of the customer being cancelled for not attending interviews etc. :eek:

Disregard the Centrelink arrangement it is just like a tenant working and having the rent taken from their wages.

The basic thing here is that the tenant has said they can no longer afford the property.

Lou

[natmarie73]

So does that mean that if I have a tenant who has organised to have the rent taken out of their benefit as a condition of tenancy, they can just phone and cancel the direct debit at any time without me as the recipient of the direct debit even having any say in it? That's rediculous! Surely the recipient of the direct debit should be able to say whether they can cancel it or not. If this is the case I certainly won't be relying on Centrepay as any sort of "guarantee" a person on welfare can pay the rent.

Nat :confused:

[Hulkster]

It's no different to any other periodical payment. If you cancel an insurance policy when you sell a house you do it without the permission of the insurer. You don't have a rental guarantee - you have a particular method of payment which the tenant has cancelled as is their right. Your right is to evict them and chase for unpaid rent.

[yadeh]

Good morning Yadeh,

I actually work for Centrelink - this is job I am trying to get away from by buying more property.

Customers who are paid one of the many benefits by Centrelink can access an item called Centrepay where money for their regular bills is paid directly from their payments. So it seems that the PM has organised this so that the money comes straight out of their payments when they are paid. However, the customer can cancel this arrangement at any time by phoning Centrelink, there is also the risk of the customer being cancelled for not attending interviews etc. :eek:

Disregard the Centrelink arrangement it is just like a tenant working and having the rent taken from their wages.

The basic thing here is that the tenant has said they can no longer afford the property.

Lou

You are right Lou. Apparently, the tenant can just call the centrelink and cancel the payment arrangement. I did not know this before, though. That is why I trusted them. Thanks,
Yadeh

[yadeh]

and your going to let one bad tenant stand in the way of your financial freedom....oh my!

You need to start seeing the forest for the trees.
Hi Grubar30

Thanks for the insight! May be you are right and I should not back away easily, especially when I know that my financtial freedom depends on propert investment.
Yadeh

[Ecogirl]

Yadeh
Don't give up on IPs because of one tennant. Yes they can cause you stress regarding cashflow when they don't pay, but most tennants aren't such a problem.

If I was in your position I would have a chat to your PM and if they don't get is resolved quickly talk to the principal of the company and get it resolved. Otherwise seek out a new PM at a different company that has a good tennant selection process.

Remember that you can't discriminate based on refugee status (which I know that you know that) but the basic requirement of the tennancy agreement is the ability to pay the rent. If they can't meet that requirement they can't stay.

Just remember that most of the time owning IPs isn't all that stressful. Cut your teeth with this one, learn from it and move on.

Good luck with it and if you need any more encouragement just post it here and we'll give you some. :D If it was really easy everyone would be doing it!

Breath deeply

Ecogirl

[yadeh]

Yadeh
Don't give up on IPs because of one tennant. Yes they can cause you stress regarding cashflow when they don't pay, but most tennants aren't such a problem.

If I was in your position I would have a chat to your PM and if they don't get is resolved quickly talk to the principal of the company and get it resolved. Otherwise seek out a new PM at a different company that has a good tennant selection process.

Remember that you can't discriminate based on refugee status (which I know that you know that) but the basic requirement of the tennancy agreement is the ability to pay the rent. If they can't meet that requirement they can't stay.

Just remember that most of the time owning IPs isn't all that stressful. Cut your teeth with this one, learn from it and move on.

Good luck with it and if you need any more encouragement just post it here and we'll give you some. :D If it was really easy everyone would be doing it!

Breath deeply

Ecogirl

Hi Ecogirl

Thank you so much for this kid advice and encouragement. With the advice of such a good people in this forum, I am sure I will not back up in this journey. When I sort this propblem out, I will let you know. Thanks
Yadeh

[Doons]

Yadeh
Have you been able to resolve your problem!!
Doons

[blossomoz]

Don't give up on property. When things have gone wrong in the past my husband has said that he was fed up & we should get rid of them.

We have to have a target & stick to it, not deviate when things get difficult, otherwise you keep switching from onr thing to another & don't get where you want to go. Have a plan & stick to it. Now my husband is very happy that we didn't sell our properties. I know they can be a pain but so can anything else - it's called life!!
cheers
blossomoz

[rambada]

Agree with all of the above. There is an alternative idea that we heard about (but have not neede to use) and it was succesful and time expedient. Offer the tenent $1000 to break their lease. If they are money hungry, it will get rid of them ASAP. It hurts to loose the $1000 but how many weeks rent does that equate to? May be better to cut your losses, move them on and get a decent PM.

[yadeh]

Yadeh
Have you been able to resolve your problem!!
Doons
Hi Doons

Yes, fortunately, the tenant is out now and new one is in. He did not pay for a month and for cleaning and rubbish removals and etc. The PM tried to recover some of the cost from the bond.
Yadeh

[yadeh]

Don't give up on property. When things have gone wrong in the past my husband has said that he was fed up & we should get rid of them.

We have to have a target & stick to it, not deviate when things get difficult, otherwise you keep switching from onr thing to another & don't get where you want to go. Have a plan & stick to it. Now my husband is very happy that we didn't sell our properties. I know they can be a pain but so can anything else - it's called life!!
cheers
blossomoz
Dear Blossomoz

Thanks for the hint and encouragement. Yes, I will definitly will stay and wont give up! Thanks
Yadeh