Protecting your investment property

Walls ripped down, holes in the ceiling, a trail of destruction and debris throughout the house, to the point where this North Shore rental property in Auckland was almost completely destroyed. 

Some of you may have seen the report on 3 News a few weeks ago – click to view.

Described as “the party to end all parties” the troublesome tenants absolutely ransacked the property leaving it completely unlivable and almost destroyed beyond repair – and have now conveniently disappeared into thin air.

The landlord is apparently overseas and reports state he may not have even heard of the destruction as yet. It certainly is an investment property horror story and one that is very costly to recover from – yet could have been completely avoidable.

With problems that had gone on for months, a regular rental inspection could have saved a lot of grief. Neighbours complained of fighting, non-stop weekend long parties, burnouts on the front lawn, women being harassed as they walked past the property, and the worst of the lot, tenants defecating on the front lawn, as they blocked the toilet months ago.

If regular inspections were being conducted and the landlord was acting on complaints from the neighbours, the problem could have been snuffed out a lot earlier.

For many landlords, a property manager is the ideal option, especially if they’re living overseas. It takes the ‘emotion’ and stress out of managing a rental property – deciding on the right tenant, conducting regular inspections, dealing with issues (damage, rent in arrears, property maintenance, and any neighbourhood complaints), and, unfortunately for some, eviction. With a good property manager, you know that problems will be dealt with swiftly, before they become major issues.

Now as you know, we’re in the property game, so you may think this is just a sales pitch for our own services. But the reality is, we actually believe having a property manager is one of the best decisions you could make as you start your property investment journey. And even if you don’t go down the property management route, using a good agency to find you the right tenant and go through the full background check process is a very sound start too.

That’s where the problems all started for this unfortunate North Shore property and landlord… tenant selection. Were credit checks done? Were references called – previous landlords, employers etc.? If these things were done, which seems very unlikely, the landlord wouldn’t be dealing with this kind of drama. Even if things had turned nasty, despite all checks, comprehensive Rental Insurance could have covered him, something most sound property managers should recommend.

If an appropriate insurance policy was in place, cover for lost rent and malicious damage could have been recuperated. Some policies even cover ‘uninhabitable premises’, which would have applied in this instance.

Landlords legally have the right to take up to four weeks bond at the start of a tenancy, as an ‘insurance’ against damage the tenant may cause. But even if a bond was taken in this instance, it wouldn’t even scratch the surface of the damage done. In all likelihood the tenants were probably in arrears as well, which leaves this landlord severely out of pocket, and probably more than a little gun-shy at getting his property back on the rental market.

So, we urge you – make sure you are certain about how your property is being looked after and cover yourself well!

Feel free to talk to us anytime about Iron Bridge property management services.