Sourcing a good tenant can be challenging. Particularly if you’ve bought an investment property in the outer Melbourne suburbs or rural country locations. When you successfully find one, you expect that those applicants will be living in your property. There’s a growing trend at the moment for rental properties to be sub-leased illegally through services like Airbnb.
It is critical that you employ a good Property Manger who can help manage your lease agreement. Regular communication is important.
As a landlord, here are a some good strategies that you and your Property Manger can do to prevent your property being sub-leased.
Property inspections
Property inspections are a valuable exercise not only to identify if your property is being taken care of, but also learning if it is being sub-leased. We recommend conducting as many regular property inspections that are allowed under law. Many Property Managers aim to inspect the property every six (6) months, but you can also have your investment property inspected within the first three (3) months of the tenant moving in. Each property inspection requires notice to the tenant, but these inspections can pick up on any unusual activities and poor property maintenance issues.
Property tenancy check
It’s exciting to get an application from someone wanting to lease your investment property, but make sure you do your due diligence on that person first. We have heard some circumstances where a tenant doesn’t present well in an application, but is willing to pay a lease twelve months upfront. This may sound great to receive a cash injection, but this doesn’t mean they are the type of tenant you really want! A bad tenant can be a very expensive mistake and cause many problems such as paying rent late, damaging your property, neglecting your garden etc. Before approving any applicant, have your Property Manager review the applicant in detail. More information on-hand will allow you to be aware if they are a good tenant or not. Don’t be afraid to contact their employer or their previous property manager to see what type of person they are.
Provide sub-leased term in your lease agreement
This should be clearly documented and stated multiple times in your lease agreement. Ensure that your tenant has no excuse to neglect your property o sub-lease it. Stopping a sub-lease via a normal sub-rental lease or Airbnb.
Having this section in the agreement signed would also be very advantageous. In selecting a good Property Manager, they will present the paperwork carefully so that the new tenant is aware that the property cannot be sub-leased without written consent of the landlord. This will set the expectations for inception and make clear that sub-letting the property without permission will lead to eviction.
Get to know the neighbours
We aren’t all fortunate to have the confidence to mingle with neighbors, but owning an Apartment or Townhouse managed by an owners corporation (body corporate) is a great way to meet other landlords. Some landlords may live in their property, while others may be investors.
The owners corporation is another third party who may pick up on unusual activities including it being sub-leased. However, neighbours will be the first to tell you if there’s anything strange happening in your property, so try to make friends!
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
Apr 2018
