The tenant ledger can come back to bite tenants

[alplant]

We have tenants who were served an eviction notice to take effect at the end of their lease, which was yesterday. They have been consistently late paying the rent and have had a few breach notices about other things as well, nothing too terribly serious, but we have just had enough of them and they haven’t really been looking after the place all that well either so it is due some serious renovation.

They got abusive with the PM after they were knocked back on at least one application that we know about because the PM concerned requested a copy of the tenant ledger, which obviously showed the continual late payments. They were angry that the tenant ledger was given out but our RE states clearly that if asked to supply the tenant ledger they will do so. They thought there was a privacy issue and dug their toes in to fight.

Apparently they also thought they could just refuse to leave and went to the RTA for advice, only to have the RTA also request a copy of the tenant ledger from the PM and then advise them to just get on with it and move out because they don’t have a case and if they take us to court they will lose.

So at the moment they are still there, and the rent (surprise, surprise) is now up to date, but they say they have now found another place and are preparing to move out. As long as the rent continues to be paid, and it doesn’t affect our insurance (have to check that), we don’t much care if it lingers on for a couple of weeks. If we have to take them to court to get them out somewhere down the track it sounds like we will win anyway because everything has been done right by the PM. Worth every cent she is paid I reckon.

 

[Peter_Tersteeg]

Good to hear that there's a light at the end of the tunnel.

I believe that property managers can make reasonable money as long as everything goes well. They work very, very hard for it when things get messy.

 

[alplant]

They sure do. They probably feel like they're between a rock and hard place occasionally, with difficult tenants on the one hand and demanding landlords on the other.

 

[Collector]

Yes - the tenant ledger is the best document when looking at prospective tenants.

As long as the rent continues to be paid, and it doesn’t affect our insurance (have to check that), we don’t much care if it lingers on for a couple of weeks

I would be careful of this - In NSW if you have 28 days to enforce the termination notice - after that you have to go though the whole process again. You should check the laws in the state the property is located.

 

[alplant]

Thanks for the tip Collector. I've just checked the RTA website and it's only 14 days here in Queensland. We now have a definite vacating date, next Wednesday, but that's getting awfully close and let's face it they were supposed to be out on Monday, so just saying they will be gone next Wednesday doesn't mean they will be.

I also noticed that we only have seven days to lodge a claim against the bond as well if necessary. I hope that means seven days from when they actually hand in the keys and not seven days from when they were supposed to be out.

Oh, and if online agent is actually up to date, it would appear they have stopped paying rent as well. So it could get messy. Hopefully the PM is on top of it, but it bothers me that she didn't actually let us know what was going on until we asked. We heard nothing until hubby drove past on Tuesday and noticed that they were still there, so rang to ask what was going on. That's the first we heard about them deciding to try it on, refusing to leave, and the RTA requesting the tenant ledger.

Apparently he can get a bit abusive and I think the PM is intimidated by him to a degree.

 

[Dazz]

So at the moment they are still there, and the rent (surprise, surprise) is now up to date

...yes, that is a surprise.

Oh, and if online agent is actually up to date, it would appear they have stopped paying rent as well. So it could get messy.

...ah, that's more like it.

 

[alplant]

...yes, that is a surprise..

... it surprised me too Dazz.

...ah, that's more like it.

... yep, back to normal expectations, what a difference a day (or three) makes.

They had a little bit in credit and were paid up til Monday so the amount owed to vacate isn't high, it's just the sheer cheek of them that makes me shake my head. Tenants, who'd have 'em, roll on retirement and those big capital gains.

 

[alplant]

Thought I'd update this thread. They moved out ok in the end without any major hassles and the rent was paid up in full. There were the usual list of things that could be attributed to them, and a half hearted attempt to remedy them, but nothing too major, nothing the bond won't cover. The walls were pretty badly marked but it's due a repaint anyway, it was last painted in 2004.

The biggest problem was a huge termite nest smack in the middle of the back yard. Luckily they hadn't done much damage to the house itself, just started on a small section of the architrave but they had pretty much destroyed a section of fence that at the last inspection in November was marked as 'intact'. I guess at a glance it looked intact - until you touched it. We were a bit annoyed that no one had bothered to tell us about it, but I guess we can't expect tenants (or PM's for that matter) to know what a termite's nest looks like.

It's been re-advertised at an additional $10 a week and with some new paint and a bit of a spruce up will probably rent relatively quickly because they are already getting queries about when it will be ready. And that extra $10 a week will pay for the termite treatment - in about 255 weeks. Sigh.

Oh and when that's done it can go towards the painting, and the floor repair (water damage, leaking shower), and the new vanity, and ...... Sometimes I wonder why we bother. Still could have been worse I suppose. The bloody termites could have demolished the house altogether.

 

[knightm]

I guess we can't expect tenants (or PM's for that matter) to know what a termite's nest looks like.

that certainly is frustrating as recognising a large lump of mud with white coloured ants in it is not rocket science!

It's been re-advertised at an additional $10 a week and with some new paint and a bit of a spruce up will probably rent relatively quickly because they are already getting queries about when it will be ready. And that extra $10 a week will pay for the termite treatment - in about 255 weeks. Sigh.

It sounds like this has got you down. If it makes u feel better the $2550 (if that is the actual cost of the termite treatment at 10per week x 255 weeks) only costs $150 in interest over a year if you used equity draw to cover it. That sometimes makes me feel better about repair bills.
10 per week equals 520 less the 150 you are still in the black!


.

Oh and when that's done it can go towards the painting, and the floor repair (water damage, leaking shower), and the new vanity, and ...... Sometimes I wonder why we bother. Still could have been worse I suppose. The bloody termites could have demolished the house altogether.

If you don't want to participate in the growing rent and capital gain over time you could always sell it?
Owning houses = work. people forget that in the boom times and are reminded in the hassle times. hang in there.

 

[Dazz]

If it makes u feel better the $2550 (if that is the actual cost of the termite treatment at 10per week x 255 weeks) only costs $150 in interest over a year if you used equity draw to cover it. That sometimes makes me feel better about repair bills.
10 per week equals 520 less the 150 you are still in the black!

Paying off debt with residential excess rents....yes, that would get depressing fairly quickly. In 4.9 years you'll have it paid off in a jiffy.

But wait !!!!


Ahhhh....the ol' Rixter way of looking at debt.

Pop it on the "never never" and just look at the interest. Great stuff.....except you've still got the debt still sitting there.

You could use your calculated $ 370 excess per annum to start to make in roads into getting rid of the debt.

Wow, you'll have it knocked off in only 6.9 years. Top stuff.

-----------


Or, just keep paying interest and pay the debt off when you sell.....but wait.....we subscribe to the never sell theory.....


Oh, bugger it, just load up the equity with the debt forever. get the termite mound on there, get the fence and HWS on there, get the gutters on there and a why not some new carpet as well. Who knows, in 15 years time, you might own 20% of it again, just like you did when you first bought it.


I just love these techniques you learn at seminars. I think Mr Kevin Young started this "never never" thing up way back. Seems to have caught on.


Doesn't make me feel any better at all.

 

[Ausprop]

if you never sell you'll never know how much you lost! (meh, paper loss)

 

[alplant]

Actually no, it hasn't really got me down, well maybe a little bit to be honest but I think that's more about getting a little tired of dealing with tenants and PM's rather than the problems with this particular place. We've been doing it for quite a while now.

We will be looking at selling in the relatively near future, retirement looms for my partner. I am already retired. There isn't any way we can lose on this place or another one we own. We have owned them long enough that the land alone is worth much much more than we paid for them so even if the termites make a meal of the place we will still be in front. Might even be better off with this one. It's a big block of land and we could put two places on there instead of one.

About those get right quick seminars. Not only did they push interest only payments as the way to go, they were usually flogging off investment properties themselves when you got right down to it and they also pushed to use up the equity in your PPOR as well. Lots of people got burned going down that route.

 

[knightm]

Or, just keep paying interest and pay the debt off when you sell.....but wait.....we subscribe to the never sell theory.....

fwiw i don't subscribe to that theory, have sold several when it suited me, always with good profits.

I just love these techniques you learn at seminars.

fwiw i didnt learn it at a seminar, I just spoke to my accountant and did it one year. As a social worker who likes his day job but with lousy pay (hence property interest)and a young family cash flow is really tight sometimes.

I generally buy ip's that are cf pos as I know I can't afford to capitalise lots of costs. Purchasing well, doing rennos and choosing location carefully all help in this regard.

I also don't believe its a safe strategy to buy heavily neg geared properties. BUT when I have had a few nasty repair bills + rates + insurance etc all at once I have done this without any problems to manage cf across the year. When I have sold a year or two later the profits have been well worth it and it was nice not to go broke along the way.

I hear what you are saying daz, but it wasn't the intention of my post to rehash some unsustainable theory from some seminar. Just what helped for me in the past.