Economic Pressure on Tenants coming back to bite landlords

[drelly]

I just had a phone call from a tenant who has only been in the house for three weeks. The main bread winner is on leave from his employment as there is no work. At this point he's on holiday pay but there may be redundancies.

Has anyone else had this type of problem yet? I'm tempted to let them go and try to find a new tenant now rather than get stuck with no rent over Xmas.

[Heg]

Got a tenant in South Auckland who has never missed a rent payment in the three years we have owned the place. All of a sudden - rent stops. Can't get hold of her as she is always "out" when my PM goes around there and her phone is always off. She didn't show to mediation so its off to TT tomorrow to get them evicted. There is obviously a problem but if we can't talk to her then we can't solve it.

Also -Got a place empty (two beddie on the shore) and struggling to find tenants. Seems there is a lot of choice out there and a lot of accidental landlords charging low rents.

[drelly]

I got into property as an accidental landlord. The market had been down for years and my old house wouldn't sell for more than I paid for it 4 years earlier so I kept it. If this cycle follows the same trend as that one, hopefully the over-supply will be soaked up eventually and rents will start rising again. Fingers crossed it doesn't take too long!

[Traff]

I've had the same as you DRelly. I've had a tenant in one of my properties for a month and he's in default of rent (3weeks). He's off to Mediation next week but i'm terminating the tenancy anyway due to NO communication and basically he can't afford to live there. He's self employed and doesn't seem to have any work and i've just been informed by my longstanding tenant of 3 years his van's were repossessed the other day - so unfortunatley i won't be keeping this tenant on.

Over the past two weeks i've had 2 beddie units to rent out in South Auckland and they were snapped up within a week - both of them had new tenants move into them on the weekend and the rent was increased both WINZ moms with their first child. I've got other tenants from these advertisments cueing up for the other 2 beddie that this guy will be moving out from. But then i have a 3 bedroom with a dbl sleepout that i can't rent out and have had to drop the rent.

If i was you DRelly if the situation isn't going to get any better then you need them to go so you can advertise and get tenants in before Christmas otherwise you'll have a property sitting there costing you money over the Holiday period.

Swings and roundabouts at the moment.

Sharon

[drelly]

Hi Sharon,

Yes, I guess it's a gamble either way but it could well be best to get the bond and let them go.

[Glenn]

There used to a story about a poster in a hospital saying the first few breaths were the most dangerous ones in our life.
Some wag scribbled on it that the last few breaths were definitely the most dangerous.

I have a little rule that if the tenant misses a rent payment in the first month then I automaticly issue a 10 day letter.
New tenants are just like new children in a class. They always try the teacher on. Us landlords never know the whole truth about tenants and thier income. Obviously tenants do have problems with income but how can you know. If you do not take action they have no chance of going off to WINZ to get some help.

[Traff]

Yes you are right Glenn we don't know the whole truth about the tenants income but if they don't communicate with you then how can you get down to the nitty gritty of what is actually going on. I was on the phone to the Tenancy Services for half an hour yesterday going through the different scenarios with regards to my mediation next week with my very new tenant. Out of the blue this morning the tenant phoned me (obviously now getting worried that this is getting serious - but at least he phoned) he told me the rent and all the arrears would be uptodate by Friday. I told him to go and get an emergency appointment at WINZ taking the 10 day notice and mediation letter with him. I told him to go and ask for some help and not to be frightened too at least the pressure would be taken off him. Apparently Tenancy Services and WINZ are working alongside eachother so i was told by TS yesterday. At least this is a start and the thing is the tenant is a really nice guy but he thinks putting his head in the sand is going to solve the problem and unfortunatley its not. I was also told he probably didn't feel comfortable about telling a female that he couldn't afford to pay, but hey he may get a 10 day notice from me but it doesn't mean i won't try and help him as long as he communicates.

[Glenn]

Goodness DBH and WINZ working together.
It sure does not happen like that in Nelson.
Well not for my tenants as far as I am aware.
With an average of one application a week I see no reason why if there had been one case I would have heard of it.
So far zilch.

[brendan]

I have a little rule that if the tenant misses a rent payment in the first month then I automaticly issue a 10 day letter.

Why only in the first month? We ALWAYS automatically issues a 10 day letter whenever rent is missed.

[Keys]

Goodness DBH and WINZ working together.
It sure does not happen like that in Nelson.

They're in the same building in Linwood here in Christchurch. Smallish, single level.

Makes for interesting comments by case managers when their "clients" turn up for mediation.

[drelly]

I went around to the house mentioned in the first post to find the tenants in the process of moving out. They say they tried really hard to contact me but didn't leave any messages because "they wanted to talk to me personally" - it's nice to see some people appreciate the personal touch still. When I asked where the rent was, they said they needed money for their hp's, loans and kid's Xmas presents and that I could take it out of the bond. Gee thanks! It's the worst rental glut I've seen in 10 years but they assured me that I'd "rent it out easy", so that's good! Of course if they clean up the combination of dog crap, drool and broken kids toys off the now very-stained concrete deck and remove the piles of rubbish and clutter it will help. It's amazing how some people can make a place feel really "lived-in" in just a few weeks! They thought it was really unfair and that I was just being an "asshole" expecting them to pay rent until I am able to get a new tenant and that I could let them off if I wanted to. I explained that I didn't think my bank manager would let me off the mortgage payments but maybe if they told him about their HP's and Xmas presents he might understand.

[Heg]

Update - we manged to get payment (via WINZ )for arrears on our Manurewa place on the day of the TT. PM got an eviction order anyway so if no rent comes in today then she is out.

Just sorted out another issue with a marriage break up. He had been paying the rent but as he had moved out, he decided to stop paying. Issued a 10 day notice and filed for meditation at the same time. Wife has paid up today and promised that she can manage the future payments on her own. Watch this space

Two beddie still vacant. Only a handful of viewings in the last week and only one application from someone with bad credit (which she mentioned to me) and a very recent TT order for $4000 (which she 'forgot' to mention)
NEXT!!!