Hello investors
I purchased a 4 bedroom/2 bathroom house with 3 large entertaining areas. Some work was needed inside and outside the house. The sellers became my rent backs and never complained about anything and so I thought all was reasonably well (apart from the jobs I was going to attend to after they leave). Their marriage broke down and consequently left earlier and I was mortified at the state they left the house in. I called in family and other friends to help with painting and repairs. It was a mad 3 weeks before the next family moved in. The house looked fine to me apart from a few more jobs but since the family was eager to move in I said that I would tend to the other later. Later down the track I ran out of finances and the tenant wouldn’t stop whinging. The contractors who worked there told me so. He eventually took me to the Tribunals and won. The court suspended the rental payments and ordered me to fix problems that he was whinging about, reduced the rent, back dated the reduction to the rental payments, ordered compensation (pay his reconnection fees etc) and he was granted to break the lease and leave in 2 months. No brownie points for guessing what I felt like doing to this character and the biased Tribunal system. Because I couldn’t afford to pay the Contractors for their jobs I was forced to sell the house 14 months after purchase. So much for investing and trusting property managers and tenants. How could I have avoided this? I bought a small 3 bedroom house which I live in and doing up as money comes along, not very fast. I also still have 2 loans on account of the other house. I also owe my parents money, which I now have lost. The real estate agent convinced me that it is better to buy a 4 bedroom house for investment purposes – higher returns. I don’t think I earn enough and therefore got myself into deep waters. Did I get sucked in? I wish I could repay the monies I owe my parents. I am embarrassed.Lamo,
Welcome to the wonderful world of property investing!!!!
I sympathize with you. I wouldn’t be too embarassed about this situation. I think most of us here that own ip’s have had this happen to them. I once owned a 2bdr unit that was so badly trashed (motorbikes riden inside, walls graffiti’d on etc.) that took ages to restore. Then when a tenant moved in they started whinging and whining about a few things. This didn’t end up at the tribunal, but it came close.
The one thing that we all need to do as landlords is treat our tenants more like customers. Sure the customer isn’t always right, but as Steve McKnight harps on about, its all about creating win-win situations. Some will surely disagree with me here but so long as you do all the appropriate checks from the start, most tenants only want to be left to enjoy their home and when there is a problem for it to be rectified as quickly and efficiently as possible.
And yes all of this happens despite paying good money to a property manager to allegedly manage the property on my behalf.
Don’t be discouraged however. Get back on the horse so to speak. I’m sure you’ve learnt your lesson.
Eric
Did you have landlord’s insurance? If so, you shouldn’t been able to claim. If not, perhaps lesson learned.
Don’t let it discourage you. I’ve had a similar experience (with no insurance!!!!) and learned – and it’s onwards and upwards from there.
Regards
Megan
Hello lamo0011,
Before letting the vendor rent back you could have gotten the real estate agent to hold some money back from your settlement – for situations like this, where the vendor that is renting back trashes the place. Pretty much like a bond. Maybe it could have covered the extra damage you had to fix up.
I have done this with my first property – and manage to hold back $1000.
Regards,
JPGet back on the horse so to speak. I’m sure you’ve learnt your lesson.
And that lesson is do’nt trust property managers and tenants.
Get it all on the contract in writting from day one.
We are in court at the moment with a tenant we areclaiming non payment of water,rent,cleaning,storage
,new doors,piant,2skips,court costs,travle and that,s about it.[argue]
If you x your T’s and . your I,s and keep “GOOD” records things should go your way.
“Do’nt trust them”
Regardshttp://www.owner.com.au
http://www.owner.com.au/phototour/listing_phototour.cfm?listingid=22315One more note , Did you claim your out of pocket costs against your CGT when you sold ?
Regardshttp://www.owner.com.au
http://www.owner.com.au/phototour/listing_phototour.cfm?listingid=20440
http://www.owner.com.au/phototour/listing_phototour.cfm?listingid=21772
http://www.owner.com.au/phototour/listing_phototour.cfm?listingid=22315westinvest, i’m sure you know youre stuff, but i hardly think we need to go to the extent of saying not to trust tenants. I mean, you sort of have to anyway. They do live in youre 2nd, 3rd, 4th….. biggest asset, right? Its probably why tenants treat landlords with such contempt sometimes. I agree that it is critical to do all necessary background checks, do regular inspections etc. however if you go in with that sort of attitude i believe youre already doing yourself and the tenant a disservice from the start. I’ve also had problems with tenants in the past but that hasn’t stopped me `trusting’ others with using my property.
Eric
Hi
We have just bought another property and the owner wished to rent it back. We informed them that this would be ok but that they would need to sign a rental agreement and the agent will need to do a property inspection at the beginning. This now means they are on a normal rental lease they paid their bond and we have landlord insurance in place. I am also a renter myself and have had landlords promise to fix things after I have moved in I makesure that it is written into the lease and that the work gets done. Maybe next time you shouldnt promise things that you cant do , I am saying this because if the tenant didnt know you were going to do the things they couldnt whinge.Make sure when a tenant takes the place it is as it is so there is no confusion over the condition of the property, this can also give you abit of leverage to raise the rent later when you do some more maintenance and improve the place.
All I can say is dont give up it may have been an expensive lesson but in years to come it will lesson the hurt.
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