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When is it time to let a tenant go?

11 March 2015 | 10 minute read
Lisa Indge

There are some situations where getting a new tenant is the best thing for your landlord from a financial and time perspective, but other times, even if they're not perfect, you should hang on to them. How do you tell the difference? 

It is a property manager’s role to advise when this is the appropriate action to take, but here are a few scenarios to consider.

The landlord doesn't like the tenant 

In fact he or she just irritates the landlord every time they request a repair because it’s usually something minor they could manage with for a while.

They pay their rent on time every month, keep the place very clean and it looks fabulous. They’re even paying good rent.

Keep them! You may not like them but they are by definition good tenants. We find that personalities can clash from a distance when you have a landlord who is not a details person and a tenant who is. This is not a reason to move them on.

The tenant is constantly late with their rent but eventually pays a few weeks late 

They don’t take great care of the property and certainly don’t report repairs as they don’t even notice when the roof has leaked.

Goodbye. A property manager should be recommending strategies to move this tenant along. In New South Wales, legislation allows for you to take the tenant to tribunal to insist on prompt payment of rent and if this is not adhered to, a termination can be processed.

The property is a bit run down 

In fact, it is in dire need of a full renovation. The tenants pay their rent on time every month and don’t complain about repairs too much, just the necessary ones to keep your property maintained.They are messy– really messy – but they are paying good rent.

When you inspect the property you are put off by the amount of belongings they have and how untidy it is. It’s fairly clean, not enough that you would be happy to join them for dinner, but passable.

If they are not causing damage to your property and reletting it in the condition it’s in would be a problem, then I suggest you leave them in place paying good rent until you are ready to do some work.

Plan the timing of the renovation so that you know how long you should be resigning them for. Save and make sure you get quotes for a new kitchen, bathroom, paint, carpet, so you are prepared.

You have a long-term tenant who has been in a property for years and is now paying sub-market rent for one of two reasons: 

Either the landlord likes them and doesn't want to upset them by putting the rent up, even though their property manager has been recommending it.

Or, the tenant threatens to move out every time a rent increase is suggested, so the increase is reduced or not put through at all.

Is this an investment or a charity? I’m sure as a landlord you have saved to purchase it and made sacrifices. As such, you should be receiving close to market rent.

Have your property manager explain that you need to receive a reasonable rent and it will be increased to X amount with the appropriate notice. And if they decide to leave, then find a new tenant at market rent.

Remember, an investment property should provide cash flow without constant headaches.

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