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Private Landlords Australia: How to Mitigate the Risk of Being Targeted by ‘Rogue Tenants’

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Now that you’ve started self-managing your property, do you understand the risks?

Self-managing, like other decisions you make about your property, presents some risks.

Learning about the risks of self-managing as a private landlord will help you protect yourself from rogue tenants.

Rogue tenants target you as soon as they learn you’re a private landlord. You’re actually four times more likely to land a rogue tenant as a private landlord.

“Private landlords run the risk of being targeted by rogue tenants. If somebody’s listed on one of the national tenancy databases then sometimes the only way for them to go is to find a private landlord because they don’t have access to those databases,” Shannon Davis

Self-management offers several benefits that make this approach more attractive to landlords.

You have an opportunity to take full control over your property and save some money at the same time.

But, to enjoy the benefits, you must prepare for the risks.

What Defines a ‘Rogue’ Tenant?

Rogue tenants come in many shapes and forms. There are many characteristics that define a bad tenant.

Sadly, these tenants are good at putting up a fake front. They will go through the initial processes until they have a signed lease agreement.

Thereafter, you’ll experience problems. They often start out as small issues and balloon into big ones. In some cases, you might need to involve the court or the police to deal with a bad tenant.

If you pay attention, you can spot some common characteristics of rogue tenants. For example:

  • A prospective tenant who leaves blanks to important questions in their application form. This is a sign they might be hiding something. Do not ignore it. Insist on getting as much information as you can during the application process. 
  • The tenants are walking out of their current rental mid-lease. Contact their current landlord and find out why they are breaking the lease. Insist on a reasonable explanation since the landlord might lie to cover up trouble they might be having with the tenants. 
  • The tenant uses a friend as a landlord reference. This kind of deception is a warning sign. Insist on at least two references from former landlords. 
  • The tenant insists on paying their rent in cash. Avoid such a tenant at all costs. The money might be illegal. 
  • An individual with unexplainable employment gaps and no professional references.
  • A tenant who offers to pay for the property in kind or offers their labour as partial rent payment.

How Do You Protect Yourself From Attracting a Rogue Tenant?

Define Your Target Tenant

You attract tenants the moment you turn your property into a rental.

Before making an investment, think about the type of tenant you want to deal with. Are you looking for a solo tenant or do you prefer having a family on your property?

If you can answer this early on, you’ll have an easier time choosing the property you need to invest in.

Knowing your target tenant early can help you decide the location and size of the property.

If you are buying an existing property, you need to find one in good condition.

Well-maintained units located near good schools, public transport amenities and shops appeal to high-quality tenants.

This will give you a wide selection of strong tenants so you don’t have to settle for an unstable tenant.

The Property’s Presentation

How you present your property will influence the tenants you attract.

The presentation begins with the pictures you share on your listing. Invest in good photography; hire a professional to take pictures of your property.

This is a one-time cost that helps you present your property in the best light possible. You can reuse the pictures every time a tenant moves out. Ensure your pictures match the actual property.

Once the tenant comes for a viewing, they should find the property in good condition.

Keep a regular maintenance schedule. If anything is broken, repair or replace it immediately. When you take care of your property, you set a standard that tenants will work hard to meet.

Rogue tenants will avoid any well-maintained property. They are sure they cannot meet the standards you’ve set. These tenants look for shabby units they can neglect or use against the landlord to avoid paying rent.

Get Landlord Insurance

Landlord insurance will protect you against honest accidents, even from good tenants.

Getting insurance specific to malicious damage and loss of rental income will help you through a bad tenancy. This kind of insurance will cover costs for damages to the property and reimburse you for any money you lose in the hands of a bad tenant.

With such insurance, you can evict a troublesome tenant without worrying about losing money.

This type of insurance goes beyond the standard building and contractors insurance. It is specific to your rental business and will cover a myriad of incidents related to having a bad tenant.

Understand Your Legal Responsibilities

Troublesome tenants will target you, a private landlord, with the assumption that you do not know the law.

Once you decide to operate as a private landlord, take time to understand local tenancy laws.

Your knowledge of the law will come in handy on different occasions:

  • When answering a tenant’s questions, especially if they have unusual requests.
  • When responding to complaints from tenants.
  • When handling a dispute with a tenant.

If a prospective tenant suspects you do not know your responsibilities, they might target you with the intention of scamming you.

Since tenancy laws keep changing, make sure you stay updated. The knowledge will come in handy.

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Is Tenant Screening Necessary?

Tenant screening for everybody who expresses interest in your property is crucial. The screening process can make or break your tenancy business.

A background check helps you filter out troublemakers and minimise the risk of handing over your keys to a rogue tenant.

A background check is your best defence mechanism against bad tenants.

After the screening, you receive a comprehensive report that helps you:

  • Verify the identity of a prospective tenant, including their current employment status.
  • Learn the individual’s tenancy history and their reasons for moving out of previous rentals.
  • Find out if other landlords have blacklisted the tenant.
  • Confirm that a foreign tenant has a valid Visa and can stay for the full term of their lease.
  • Understand the prospective tenant’s financial history, including any history with bankruptcy. 
  • Find out if someone who claims to own a company is in the ASIC company directorship directory. This is important for individuals who writes ‘business owner’ in their employment history.

After you receive the screening report, you might need to speak to former employers and landlords.

While this might take time, it can save you money in the long-run.

Honest tenants will give you a list of references you can call to confirm everything they have told you. They often have nothing to hide.

If a potential tenant refuses to give you a list of references, move on. They are most likely trying to hide information that could influence your decision.

How Can Private Landlords Screen Tenants?

Agents have access to different resources that help them identify blacklisted tenants. For example:

  • The National Tenancy Database
  • TICA
  • Trading Reference Australia

As a private landlord, visiting each database can take time. This is especially true if you consider smaller, region-specific databases.

You need a solution that gives you a comprehensive report while also saving you time. Welcome to Lodge.

Lodge offers a tenant screening solution that generates a report in under 60 seconds.

Once you get written consent to use the individual’s personal information, you submit it to Lodge. Thereafter, you will have your report in under a minute.

With the report, you can make a decision whether to ditch the tenant or move on to preparing the lease agreement.

Lodge offers you a comprehensive screening tool, saving you time and money.

Instead of worrying about handing over your keys to a rogue tenant, sign up to Lodge today. You will receive all the information you need to verify a tenant’s credibility.

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