Should we just sell?

[see_change]

Not paying rent by a tenant is not a valid reason to sell.

In this case, the first action I would take is to review the PM. A good PM should never let a tenant staying more than 6 months without paying rents.

Finally

Surprised no one mention PM earlier .

You need a decent PM .

ask for advice here on who's a good one .

Ring up all the PM's in the area and say you're interested in buying in ashmont but you've heard it's problematic and what do they think about it . ask them is it easy to get good tenants in the area ? think of other questions to ask priot to tinging up.

Cliff

 

[cimbom]

The tenant was meant to leave at the end of last week and our PM was going to do the final inspection on Saturday. They are still in the house and did not answer the door on Saturday. We have another hearing at the tribunal this Wednesday - I'm really hoping the tribunal member has some sense and does not give them any extra time after 6.5 months of not paying rent or even speaking to the PM. It will be good if they tribunal evicts them as this means the insurance will pay out for 15 weeks instead of 6.

On good news, we are now up-to-date with the mortgage and paid our insurance the day after I made my initial post, leaving just the rates owing. We've decided to hold on to the property, at least for now.

 

[Corey Batt]

Will you be changing property managers or just chalking this up to a one off bad tenant experience?

 

[thatbum]

We have another hearing at the tribunal this Wednesday - I'm really hoping the tribunal member has some sense and does not give them any extra time after 6.5 months of not paying rent or even speaking to the PM. It will be good if they tribunal evicts them as this means the insurance will pay out for 15 weeks instead of 6.

Do you know what sort of hearing date it is and what is being sought or argued over?

 

[jackbak]

The tenant was meant to leave at the end of last week and our PM was going to do the final inspection on Saturday. They are still in the house and did not answer the door on Saturday. We have another hearing at the tribunal this Wednesday - I'm really hoping the tribunal member has some sense and does not give them any extra time after 6.5 months of not paying rent or even speaking to the PM. It will be good if they tribunal evicts them as this means the insurance will pay out for 15 weeks instead of 6.

This is the problem with buying for cash flow, a lot of the time you're dealing with lowlifes.

I know nothing about Wagga but assuming you did your due diligence before hand and you think it's a good investment I would always recommend holding the property for 6-10 years - you need to give it a chance. Unless you have another year or two of bad tenants - that may force your hand.

 

[Corey Batt]

This is the problem with buying for cash flow, a lot of the time you're dealing with lowlifes.

I know nothing about Wagga but assuming you did your due diligence before hand and you think it's a good investment I would always recommend holding the property for 6-10 years - you need to give it a chance. Unless you have another year or two of bad tenants - that may force your hand.

It just depends on how scummy an area that you buy in, the type of stock and how diligent your property manager is.

 

[jackbak]

It just depends on how scummy an area that you buy in, the type of stock and how diligent your property manager is.

Correct, but the 'scummier' the area, the worse the clientele.

 

[beachgurl]

I have a property in ashmont and its completely pot luck on how the tenant ends up (and also if the neighbors like the tenant). My last tenant was an excellent payer, always up to date. But then someone set fire to his car in the driveway so he moved. When things are quiet it is my most CF + property. Other times I just cross my fingers that the PM can work their magic. Perils of buying in an area like this.

 

[Deltaberry]

The last time my tenant didn't pay, I made sure my PM went with locks and bars and closed him down.

I got all the rent in cash next day.

 

[nhg]

I've had multiple tenants not pay rent at the same time. Yes it sucks. It is part of the game however. Made me grow a thick thick skin.

I have noticed some properties will continuously attract bad tenants. One in particular I've had trouble with all 3 tenants. It is hard to let go of however as 2 weeks rent covers an entire months expenses. So I just kick them out and claim insurance.

For how much longer I can keep it up for? I'm not sure. The capital gains was about 15-20% over two years.

 

[Zos]

I am amazed at the lack of power the owners have to remove a free loader. Really you can't just come in and just start throwing all their items out on the nature strip?

This to me comes across as being the same as going away on holiday and in the mean time someone moved into your PPOR. You come back and would probably call the police and get them removed.

Why the hell does this not work for the OP?

6.5months is crazy, I don't think I could be so patient and kind.

I hope you get it sorted OP!

 

[thatbum]

I am amazed at the lack of power the owners have to remove a free loader. Really you can't just come in and just start throwing all their items out on the nature strip?

This to me comes across as being the same as going away on holiday and in the mean time someone moved into your PPOR. You come back and would probably call the police and get them removed.

Why the hell does this not work for the OP?

Because once upon a time, too many residential landlords were doing this and getting it wrong - so now it needs to be go through a tribunal or court first.

And having a lease and one party breaching the terms isn't exactly the same as randoms moving into your house while you're on holiday.

 

[Zos]

These people have not paid in 6.5months, they do not deserve any chances or any more time.

No wonder things like this happen with tribunals happy to give them more time.

As you say they have breached their lease agreement which should automatically mean forfeiting any rights in living in that property.

Just angry the decent people in this country get screwed while the scum bags are taken care of.

 

[cimbom]

Good news - they've been ordered to leave by the tribunal

 

[D.T.]

Good news - they've been ordered to leave by the tribunal

Great, so in 6 weeks when they can get around to it?

 

[Zos]

Great! How long do they have to get out?

So would these people be put in the black book and never be able to rent?

Not that I care about them just interested how the system works? So that it does not happen to someone else.

 

[sanj]

Just cut the water supply.surely the fine you would get would be less than the 6 months of no rent??

 

[cimbom]

Bit of an update. Obviously, the tenant is long gone. We had an initial quote of 3k of repairs to get everything back to how it was. I paid this and got most of it from insurance. We then got another quote after all the rubbish was removed, revealing the real nature of the damage, especially to walls and carpets. All up, from this tenant, we ended up losing ~15k in lost rent and property damage. We purchased the house for 150k and about half of this is land value so it's a proportionally very big loss.

I didn't expect anyone to sign a lease while it was being repaired but we still haven't got a tenant. The PM got a few applications but all had bad references. One missed the inspection as he was waiting for his girlfriend apparently. The PM told him to call back another time and reschedule. He said that she should call him as he can't afford to make too many phone calls. Unfortunately, that seems to be the quality of the tenants in this area.

I have decided to wait another couple of weeks and if we have still had no luck, I will put it up for sale. I will be happy if we can get say ~170k for it so we can clear the mortgage, pay all costs and get rid of some other small debts we have. Once my husband has finished his medical studies, we'll look for some better investing options as we'll have the cashflow and borrowing capacity to support it. I didn't want to do this but there are 4 pages of rentals showing up on realestate.com.au (even though ours is the only 4 bedder) and a lack of suitable tenants. I don't want to be throwing away the kind of money we lost this year repeatedly by accepting subpar tenants justs to avoid vacancy. Any CG would barely cover this anyway and we'll likely be kicked off insurance if we made another claim next year. Not that I think even selling it will be easy.

 

[MsAli]

Sorry to hear that cimbom. When you were buying, I wasn't clear why the area was chosen to begin with as you could buy old units in Mount Druitt for 180k.

It's a lesson for everybody buying IP to look at quality rather than buying something for the sake of it.

An investor on SS, who I shall not name once told me that no point buying tons of IP's for the SS bragging rights. I'm glad I listened. The bigger your portfolio gets the more you will hear about tenants leaving, broken hot water etc etc. Easy to have the return chewed up in regional. Another very successful investor/BA I met around 4 years ago, said to me to not settle for less than 10% return in regional anyway.

Hope you recover fast from this loss & next time do your due diligence & buy something of quality, which you should be able to do once you have dual incomes

 

[Spades]

Hey cimbom,

I decided to sell an PPOR turned into IP after 1 bad experience and the tenant poole was my decision to sell.

I now know what my sanf is.

I wish you the best of luck whatever you decide.