So it starts, here comes the second notification from the bank noting the absence of loan repayments for your investment property. Yay. The next one is a serious one. You feel it tumbling, knotting in your tummy from pure anxiety. It's the second time this happens; your tenant hasn't paid their rent, it's now 3 weeks behind. The notice to vacate has been issued, which won't improve the outlook for the foreseeable future.
This is a nightmare situation, one which, luckily, doesn't happen to a lot of people, but too many nonetheless (unluckily). As an owner, it's easy to sit back and think that everything will run on a smooth sail into the golden horizon of careless property management. And it might well do that, only until it doesn’t and the ketchup hits the fan. With the current landscape, owners are unfortunately often responsible to ensure they take preventative measures themselves, even when they are with an agent, and it's far better to prepare and be risk-averse, even when the problems aren't as severe, say when the tenant has innocent reason for being late a couple of days late. Let's have a look at some of the pitfalls to prepare for, being proactive, and how to act in the worst case scenarios.
Prevent | Know your tenant
Let's put it straight, the number one reason for disruptions in rent payments, and in overall, is tenant selection. Make sure your agent does thorough work, don't let them off the hook too easily. Mind you that they are managing 150+ properties and your property is probably just a number, but you are paying for a service and as such, a right to require sufficient service levels, that includes finding a tenant, one that has the best intentions towards your investment, just like you have towards a good tenant. Good tenant selection is an article itself, it's ridiculous that we have to write some tips around motivating your agent, seeing as it really shouldn't have to be a thing. But here are 3 steps to ensure the right person finds a home in your investment.
Make them accountable
Introduce yourself to the selected tenant