I do enjoy hearing and communicating with many of you. I have seen my share of happy and less than happy property investors over the years. Not that all PI’s selling are unhappy. A few months ago I got an angry sounding email from an out of town member who had joined only 12 months previously.
They said they were selling due to the actions of the current Government and also made some bad comments about their property manager. But then recently a number of new people have paid to join saying they have purchased properties and want to know how to go about choosing tenants, and so forth. Like do we have a bad tenant register, do we offer a free for all tenant vetting service and whatever. I see the churn of PI’s and even tenants as a good sign of a healthy society.
However we all need to remind ourselves that whilst every new PI on the block brings some new ideas and energy to the market there are some basic issues that often get ignored or avoided at
your peril. It is a well-known fact that those who have never
made a mistake have never discovered much. In our industry making a mistake can hurt you financially and emotionally. I have covered some of this stuff in the past but it will not hurt to be reminded.
Firstly when showing prospective tenants it is imperative that you get them to fill in an application form. Failure to do this may mean you get accused of discrimination on the basis of sex (50% of society are one or the other), age, employment and so on. Those applicants with the most to hide are the ones who will decline to fill in an application form. On this form you must have a statement that they are granting your permission to carry out checks of the applicant. Secondly you should carry out three basic checks. Past landlord, credit check, and Tenancy Tribunal entries.
There is no point in doing a prior landlord check unless you have checked who the owner of the property of the prospects last tenancy is. You do the owner check on Terranet and or LINZ. Both of those checks are free. You can do a credit check on TINZ (now called illion Tenancy). Illion offer a good discount to financial members of Nelson PIA. Their credit checks also check
the tribunal records.
All tenancies need to commence one week rent in advance and preferably four weeks bond. The bond needs to be lodged right away or else you will be in big trouble. I repeat do not try and collect the bond after the tenancy starts.
Do not sign the tenancy agreement unless all the money has been paid. Failure to grant access to the property after you have signed a tenancy agreement but not collected all the money is an unlawful action so do not do it.
Glenn Morris is the Treasurer of the Nelson Property Investors Association