Be the renter! Why understanding your tenants is crucial? - JUNE 2018
By Rich Harvey, CEO & Founder www.propertybuyer.com.au
You've surely heard the Golden Rule – Do unto others as you’d have done unto you.
While this excellent life-lesson in empathy can be applied in a variety of situations, it should be your property investor mantra.
As a landlord, you have a range of responsibilities to a number of stakeholders from agents and lenders to legislative bodies, but there’s one important clique you must empathise with.
As such, take a moment and ‘be the renter’.
Try it early
Understanding the importance of getting the right renter for your investment is vital. The trick is recognising very early on what sort of tenant your property will appeal to.
For example, if you’re buying close to a university, will you shoot for a durable, low-maintenance home with multiple bedroom and bathrooms that will appeal to a share house situation? Perhaps your area of interest is dominated by family tenants where nothing less than four-bedroom, two-bathroom accommodation is required. And don’t forget a fenced easy-care yard for pet owners.
An intimate understanding of what demographic types rent in your pick suburb means you’ll seek holdings which appeal to the right household composition. It can be the difference between having ongoing tenancy, or sitting vacant a few weeks each year.
Do it often
‘Be the renter’ doesn’t end once you’ve managed to get the new resident’s signatures on the lease.
As a property owner, a lot of problems can be avoided if you treat your tenants the way you'd like to be treated if you were renting the home.
Just as they have an obligation to pay the rent on time and treat your property with respect, you have similar obligations to ensure they have a safe, functional home. Most of the landlords and tenants I’ve met understand this. Unfortunately, there are property owners who, for one reason or another, decide to adopt a tougher approach with their tenants. Frankly, they bring a world of issues down on themselves – particularly when they breach their legal requirements.
As an empathetic landlord, it might even mean going above and beyond the normal guidelines, particularly if you want to keep on an excellent tenant.
Need to carry out some major works that will severely impact the tenant’s enjoyment of the property? Perhaps gifting them a week’s rent might ease the discomfort. I’m even aware of landlords who to drop off a thoughtful gift each Christmas – perhaps a bottle of wine or a voucher for a local café.
It’s not all about altruism and the season of goodwill either. Happy tenants keep homes in order and are more likely to stay on come lease renewal. They also tend to be more flexible when emergency access is needed. Who’d have thought a small gesture could pay such handsome dividends?
Your tenant will rightly have expectations of you as the owner – and they’re enforceable.
Tenants expect the property to be in good order when they move it – a working hot water system, gutters that won't overflow come first downpour and appliances operating as advertised.
If the property is handed over in good order, there's a much greater chance it will be kept that way. If the property has a faulty tap, jammed gutters, gates or an oven that only works when the element is Fonzie fist-bumped, you're sending the tenant a message - we didn't bother too much about looking after things, why should you?
Maintaining the relationship
Of course, lack of maintenance is a major bugbear for tenants, but if more owners tried to ‘be the tenant’, these disagreements could be avoided.
Treat it as a reasonableness test. How would you feel about a broken oven that wasn’t repaired for weeks on end? How about the same for a hot water system… in winter… in Canberra?
When you rent your property to any tenant, they rightly expect everything to work for the duration of their lease. They’ve paid for a functioning home and it’s your responsibility to maintain it.
The other benefit of maintenance, apart from protecting the value of your investment, is that happy tenants aren’t going to call the property manager over trivialities like a blown light bulb. Again – flexibility in the arrangement makes everyone a winner.
Inspect with respect
When it comes to tenant complaints, here’s a big one that ill-informed landlords have been known to breach.
Feel like dropping in unannounced whenever the mood suits to have a look at the property? Think again. Firstly, it's not legal. Secondly, if you regularly coerce your tenants into allowing the impromptu visit, it's not likely to build trust.
Tenants have a right to privacy. It may be your property but, for the time they live there and pay the rent, it's their home. They have a responsibility to look after the property and a legal obligation to allow inspections per the Residential Tenancies Act, but they have every right to live in their home without being unfairly bothered.
Simply apply the rule and ‘be the tenant’. How would you feel about the landlord popping over for a sticky beak every now and then? If you went unannounced to inspect most homes after a birthday party, or a kids' sleepover, or post a friendly gathering to watch the footy, you'd find an untidy house. There might be furniture out of place and the floor could need a vacuum, but this is part of everyday life and your tenants are just as entitled to it as any homeowner.
Being a landlord isn’t a set and forget strategy, but by applying the simple rule of empathetic ownership you’ll foster great relationships with awesome tenants and probably sleep a little easier each evening.
Finding the hot prospects
Here’s where we can assist.
Buyers’ agents can help you locate a great prospect. Whether you’re a small developer looking for a profitable medium density development site, or a resident keen to seek a newly built structure that provides an alternative to more traditional housing types.
Our experience and business networks come into play to ensure you can secure real estate that ticks your boxes and offers the best chance of growth potential.
If you’re looking to explore more of the medium density world, call us.