Unless your first investment property comes with a rental guarantee (i.e. paying you X amount over Y period regardless whether the property is rented or not), the first thing you would do right after the settlement is finding the first tenant for your first investment property because leaving the property vacant for a long period would be your least preferred option. To overcome such anxiety quickly, you may be tempted to grab the first prospective tenant who walks through your door, without doing a background check properly. Needless to say that a bad tenant can potentially cause you all sorts of stress – both emotional and financial. Once the tenant is entrenched on your premises and things start going wrong, it might cost you far more than just a couple of rental payments.

When you choose a tenant
You must research them thoroughly – credit checks and employment checks are a must. Assuming that you have appointed an agent to act on your behalf, you must specifically stipulate the condition in the agent agreement – ‘You (agent) must pick up the phone and speak with employers and past landlords or agents.’ The last thing you would want your agent to do is simply relying on tenant registries and the written words on the application form. Never underestimate your intuition. If you do not feel right, do not proceed.

Once they have moved in
Keep your eye on them by
1) Inspecting your beloved investment property as often as the law allows;
2) Monitoring rent payments – Never allow them to build a habit of paying late;
3) Attending to repairs promptly – They may use this as an ‘excuse’ of not paying rent or paying late; and
4) Being specific with special conditions – maximum number of occupants, pets, etc.
You must make the effort to let the agent know that you are watching closely – Never just rent and forget.

How to deal with late payments
If your tenant starts missing rent payments and soon falls behind in rent, they could potentially end up costing you a lot of money if you do not take swift action.
Please note that you cannot take action to evict a tenant for unpaid rent of less than 14 days. However, you (and your agent) must actively monitor rend payments and given a strongly worded reminder by phone, email, SMS or mail (i.e. written by your lawyer if necessary), when payment has not been received for the current payment period. You must train them early so they won’t build a bad habit of ‘it is acceptable to pay late’.

Eviction process is not easy
The eviction process takes time – beginning with the obligatory notices and ending with the tenant vacating the property. Unpaid rent can quickly accumulate during the period. In other words if you choose to commence the eviction process, you must initiate it as soon as you become aware that the tenant is at least 14 days in arrears. There is nothing wrong with being a diligent and persistent landlord. Do not let your good nature misjudge the common practice in business.

Why having a regular inspection is important
You would not want your first investment property into a state of disrepair and damage. Failure to adequately care for and maintain the premises may fall into such undesirable situation. Regular inspections can help keep on top of this situation. A tenant is under an obligation to retain the premises in a good state of repair and in a similar condition as when they took possession of the premises (excluding general tear and wear). Tenants have a duty to notify the landlord of any damages and the landlords have a duty to repair them. After all you are actually doing yourself a favour – keeping your property in good condition and the repair costs are generally tax-deductible.

Noise and nuisance
Did you know that nuisance is the ‘unlawful interference with a person’s use, or enjoyment of land, or some right or in connection with it’? In other words, in the law of tort, nuisance is a civil violation. Your tenant must not cause or permit nuisance, or interfere with the reasonable peace, comfort or privacy of their neighbours. If they continue to do so, even after receiving multiple warnings and request to cease, they can be evicted.

Multiple occupants on premises not listed on the lease agreement
This happens often if your premises are rented to students near a university. The lease agreement must stipulate the maximum number of occupants in the property, and sub-lease is strictly prohibited. In the event that such condition is violated, you can repudiate the lease agreement due to the breach of condition and evict the tenants.