Advice on giving young folk a chance.

[Gibbonz]

We have just completed building a 4 bedroom home as a rental. Over the last 2 weeks we have been surprised at the number of young people who have applied to rent this. We mean 17 to 20 yrs old. They figure it is worth paying an extra $30 each a week to get something modern, warm, clean and with all mod cons. How do other landlords manage? The latest group offered little evidence they would be reliable tenants….no significant history, so we asked for parents to sign a guarantee to give us some security, they said they were independent. Are we being unreasonable? We liked the group and would like to give them a chance.

[BusyLizzy]

I'm all in favour of giving young folks a chance... but my concerns would be around how well would they care for the place?!

I am continually astounded at how some of the younger ones (ie 22-25 yrs) at work still have no idea about how to keep a communal kitchen area clean!! It's like they expect Mummy to come up behind them and rinse out the cereal bowls and coffee cups, load the dishwasher, wipe down the bench, etc. I'd hate to see the state of their bedrooms!

It's wrong to generalise, but 17-20 year olds would probably be worse! That may not be such a problem in a older house, but I'd be concerned about a brand new house. It could amount to very rapid wear and tear. Also, they probably more party-oriented at that age.

Do you have any alternative, older properties that you could offer them?

[LondonKiwi]

Do you have any alternative, older properties that you could offer them?

I think that defeats the purpose as the young ones wants the mod cons. Difficult one to answer but at the end of the day its your investment and you have to be happy with the tenants that are looking after it. IP is a business and you need to treat your properties as such!

LK

[SuperDad]

Hi Gibbonz,

One thing that I have heard landlords do is put new tenants on a one month fixed-term tenancy. If the tenants are no good, it is easy to get rid of them. If they are good, then they can be rolled over to a periodic tenancy. One month will give you an idea of how well they will treat the place.

Tell the tenants that the fixed-term tenancy agreement will allow you access to the property once a week, to check it out. (You would write this into the agreement.) If they are not happy with this, I wouldn't put them in. Also, take the full four weeks bond.

I haven't actually done this myself, but I have read of others doing it.

Paul.

[Perry]

hello, Gibbonz

I do what Superdad described. An initial fixed-term tenancy
of just 4 weeks. A renewal fixed-term tenancy of 8 weeks.
That gives me nearly 3 months to be sure. I make it clear
that any significant 'lapses' of the tenancy agreement obligations
will prejudice any potential for renewal.

After 3 months, if everything's worked out OK, most tenants
seem to go for 6-12 months as a further fixed term extension.

I never use periodic tenancy agreements. I have my own
tenancy documentation and extensions are done via a Deed
of Renewal & Variation, which is quite a simple process.

Of course, if they're all in employment, multiple income streams
is something to be factored in, which may reduce the default
risk, slightly.

[RentMaster]

I often think that the first hunch opinion on a prospective tenant tends to be quite accurate. So if your initial though is that they are not good, then maybe you should keep looking. It is often better to leave the house vacant for another week while you keep looking for someone else than to try to evict a troublesome tenant later.

[xris]

An excellent technique of Paul and Perry - one month fixed to start off. Not sure about this though.

Q Tell the tenants that the fixed-term tenancy agreement will allow you access to the property once a week, to check it out. (You would write this into the agreement.)

Have I missed something?

xris

[SuperDad]

Hi xris,

I'm not sure that you have missed something. I was thinking out loud when I suggested once-a-week access to the property. I'm not sure how this sits with the RTA (Section 4 - it seems that bona fide property inspections may only be carried out once every 4 weeks (as per Section 48, Subsection 2b).

However, Subsection 2c(ii) does allow the landlord access (with 48 hours notice) entry to check that the tenant has completed "any work agreed to be done by the tenant". Now, I'm not sure that this stretches to "work" such as keeping communal areas clean and tidy, but if that "work" is stipulated in the tenancy agreement, then maybe it does?

I'm just trying to think of a way that protects the landlord's interests, especially in the early weeks of a tenancy. It seems unfair that you can hand over the keys to your (say) $330K investment, and then have to wait 4 weeks to see whether the tenants have trashed it. But then as the saying goes, "The law's an ass".

Paul.

[Perry]

Gibbonz

When they come for a look, always have a look at the
inside of their vehicles. Always. It's a sure sign of their
tidiness habits. Or lack thereof. I've seen some horrors
that looked like 4-wheeled trash trains. The only 'tidy'
floor space was where clearance was required to use
the foot controls.

[RonHoyFong]

Whatever your decision:-

"Do not be motivated by having an empty property to accepting the first prospective tenant that comes along!"

If your feeling tell you something is amis then move on to look for another tenant. You will end up worrying at night otherwise.

In the big cities there are student accommadation

On the other hand there are also a large number of adult tenants who aren't exactly good housekeepers either, are party goers, and bad payers of rent.

You will be far better to wait for the next lot of people and if they aren't there then perhaps drop your rent a little.

Refer my post "Tenant from Near Hell"

http://www.propertytalk.com/forum/showthread.php?t=2637&page=28

Cheers ron

[xris]

Gibbonz

When they come for a look, always have a look at the
inside of their vehicles. Always. It's a sure sign of their
tidiness habits. Or lack thereof.

Aghhhhhh!

I'm off to spend some time on my car with an empty rubbish bag in hand - pronto.

[artemis]

Lovely group of 20ish young women living next door to me. They are such good recyclers too. Usually a dozen or more boxes of empty bottles most weeks. And they have such nice friends around for a few drinks. Not.

They and at least some of their friends appear to be binge drinkers - way past the point of any control, smashing letter boxes (mine 3 times this year) and bottles and the usual unsanitary behaviour and inconsderate noise.

Last year had an equally nice bunch of young men. Left the place in a right mess. Example - the landlord said they had big planters inside sitting directly on the carpet which was ruined of course. (I didn't ask what they were growing but it was probably not petunias.)

No way I will let to a group of young people. Butter wouldn't melt, I am sure. Until they are signed up.

[drelly]

The potential for damage may be greater. Young people seem less able or willing to control the behaviour of their friends than older people. I had a party of over 200 people at a house I rented to teenagers (With parents on the agreement thank God!). You could always try the "no parties" clause. Doubt it's enforceable but worth a try.

[Hound]

Don't let your feelings get the better of you, Gibbonz.

Yours isn't the only rental available. Remember it's brand new, so don't take the risk.

The young 'uns can cut their teeth somewhere else.

[xris]

Hello gibbonz,

My experience of young groups is twofold.

First, if things go wrong it is fairly easy to trace them and to get your money back because of their lack of worldly wisdom in avoiding detection and the different sources of income they provide.

Second, what sense of responsiblity each might have individually is lost when they all get together, with each one thinking it is somebody else's responsibility, which generally means there is no sense of responsibility.

When decision time arrives, my second experience weighs more heavily on my mind than my first.

xris