I’ve always believed that if you’re kind to tenants, they’ll be kind to your investment. It’s a naive thought but one I still try to go by, basically so I can sleep at night and not have to worry about what is or isn’t happening inside my retirement nest egg. Even so, the rules around rents, bonds and evictions can create all sorts of headaches for landlords, depending on the state you live in, as they’re often stacked in favour of the tenant.
BY LAUREN CROSS
I consider investing to be a fun and rewarding process, as well as a long-term plan, so I’m not too fussed about a dollar here or there. Over the past two years, I’ve given my tenants on the Gold Coast anything they asked for. They could change colours, drill holes, put shelves in, etc. I fixed and repaired anything they wanted without question. I even recently put air conditioning in the unit for free and didn’t ask for any sort of increase in rent, simply because I figured this would make them happier there and also add some value to the unit (the sun can be a real killer with my west-facing apartment in summer.)
I knew they loved living there, so I was shocked when they suddenly gave my property manager notice to leave (apparently they wanted more space after having a baby). After more or less bending over backwards for what I thought were dream tenants, I was even more shocked to find out they only gave two weeks’ notice. By the time I actually found out they were leaving and a new ad went up on the internet, I had just 10 days to find someone. Ten days!
Given the current vacancy rate on the Gold Coast (where lots of two-bedroom apartments on the water are now available) I was feeling a little stressed out about my tenants’ sudden departure. I asked my property manager if 14 days’ notice was actually allowed and yes, by law, tenants need to give just 14 days’ notice in Queensland if they choose to leave a property.
On the other hand, if a landlord decides to put new tenants in or end a lease, they need to give a massive two months’ written notice! Is it just me, or does this seem unfair? It appears that in many cases, rules regarding rent, bonds and evictions actually favour the tenant, even though the landlord is the one paying for rates, repairs and property managers.
Unfortunately it gets worse. Luckily for me, my tenants always paid the rent on time and treated the place like a mini palace. But if tenants ever default in Queensland, you practically have to roll out the red carpet for them, just to get back what’s owed to you. The tenants have to be sent a breach notice after seven days, then given a notice to rectify the breach after another seven days. Any other breach, such as not maintaining a garden, requires another 14 days’ notice. So an entire month has gone by before you can even get a new tenant in! Talk about a headache!
Tenants must also be given plenty of notice in some states for rental increases.
In New South Wales and Victoria, it’s 60 days. Victorian landlords can’t charge more than one month’s rent either for a bond, if the price of their rental property is $350 per week or less.
Personally I feel that all these rules and regulations make it very tough on landlords and it would be nice to have the tables turned. After all, it’s your investment! I can accept that law is law and if a tenant wants to leave after 14 days, they have that choice. But surely a bit of common courtesy wouldn’t go astray – and tenants should treat their landlord the very same way they expect to be treated by their landlord. In fact, we’re always hearing about how tough tenants have it. How their landlord is mean, how their landlord is increasing the rent, how their landlord won’t give them brand new everything! But there are plenty of landlords like me who do everything they can to make tenants happy. In fact, landlords are sometimes so desperate for a good tenant, they’ll even keep their rental rate lower than what it should be in many cases, just so they can keep a good, long-term tenant.
As with any problem there’s always a solution. Despite my 14-day drama, the good news for me is that I actually received an application within a few days (again, I was shocked!) so I’m still sleeping well at night. But some landlords are no doubt stressing every day about the fact that they want to evict a tenant but can’t.
What has your experience been? Have you ever had to wait weeks and weeks to evict a tenant, or not been given your rent for months? For more information on rent, bond and evictions, check out page 32 of this month’s API edition, where we examine what the rules are for landlords in each state.
Lauren Cross is a journalist/subeditor of Australian Property Investor magazine, www.apimagazine.com.au