Can Landlords Reset After A Rental Nightmare

We talk through what a tenancy gone wrong really looks like, including why it can happen even with good screening and years of smooth renting. We share real examples, unpack the legal process, and lay out how landlords can protect their finances and rebuild trust for the next tenancy.

• why bad tenancies are not always property manager failure
• how life events can turn a long-term tenant fast
• real damage scenarios and what insurance claims can look like
• the step-by-step process: breaches, notices, court timelines, bailiffs
• hidden costs: bailiff fees per tenant, travel costs, lock changes, skip bins, clean-up
• what property managers do behind the scenes to reduce conflict and costs
• resetting your mindset so you do not distrust every future applicant

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Transcript

Welcome And The Real Question

SPEAKER_01 0:09

Welcome back to the informed investor. So today we will be talking about when a tenancy ends badly, what does that look like? What does that involve for the investors? So, Ash, if you want to just kind of run through, I guess, how a property manager would handle that, what it looks like for the investor, what sort of hidden costs they could kind of come across

Why Bad Endings Are Not Simple

SPEAKER_01 0:27

as well.

SPEAKER_00 0:27

I think the first thing that's worth mentioning with uh tenancies that end badly is that it is not a situation where property managers have put a crappy person into a property. Let's start off with that. Yeah. Like sometimes that can happen. Um, and actually, if we even bring that forward a little bit, and and I'm sure we'll do another um conversation on application processes, but quite often the application that we're processing, there will be times that tenants have lied on it, and a property manager just generally hasn't um picked up on that, or it's been impossible to see that they've been lying. The second um thing is that we do have tenants that have been great tenants and have gone into um some sort of situation which has caused them to have financial stress um or behavioral issues in a property. So I guess that's just really important to know that um tenancies that end badly haven't necessarily um been from any laziness or property management or anything like that.

SPEAKER_01 1:32

Correct, correct. Something that uh we see pretty often where it just kind of comes out of nowhere. Yeah. When I had a portfolio that had a significant amount of high-end properties, you'd be surprised at how many issues actually came with those. Uh a lot of people fall into, you know, bad situations with their relationships, family, deaths. Um, and obviously when you're in a higher-end property, the rent is so high. As soon as there's some sort of hiccup, it can really spiral very quickly. And no, you know, the bond doesn't always cover the arrears, let alone any damage to the property. So yeah, it's definitely it's you could have the best tenant in the world. You could have a great tenant, have them in there for six years, and then just something happens, they hit a bump in the road in their life, and suddenly it all turns around.

SPEAKER_00 2:15

Yeah. And and and every property manager is going to experience this. And I think, like, if you hold onto a property long enough, nearly, you know, all landlords have an issue. And I guess the difference is the the severity of that bad tenancy um and what level that looks like.

The Shocking Damage Stories

SPEAKER_00 2:33

So um, I guess I'll share a few stories of the really bad ones that we've had because we've had some shockers. Yeah. And I've never had them in the whole like, yeah, 20, 20 years with Soko. So we have um had one that was, I think it's okay to share, isn't it? I'm not saying addresses or names or anything. Yeah. No, I no identifying info. No, I think. All right. So one recent one which was also incredibly sad was the tenancy where we had a um a high needs child, that one in the property. Oh, yeah. And that was really sad because it wasn't that the tenant was um doing anything wrong or such. She paid her rent. Um, she did have a high needs child that did damage the property and it went on for a long time. We um, all the property manager tried to handle that and handle that behavior for a long time. Um, and then it got to the end of the tenancy where the owner was just like, I like that this property is is just not it's just it's completely trash, basically. Um that insurance payout. Oh, how much it was about $80,000. $80,000 that this owner got paid out. And this was to um like the ceilings, the windows, the doors, the kitchens. Like we're talking everything in this property.

SPEAKER_01 3:53

Yeah. The property manager actually FaceTimed me from the property when she first got there, and she said it was the worst she'd ever seen. All of the windows had been smashed in, and she actually said she could tell because the glass was on the outside, like on outside around the property. The windows had been smashed from inside. The walls had been damaged down to the brick, all of the lino had been pulled up, all of the doors were snapped. It was like I was really shocked as well. I've never seen a property that bad. I've definitely seen properties in a very dire state. And most of the time they're full of a lot of rubbish. This one was pretty empty, but it was just it honestly, I'm surprised the owner didn't think about knocking it down.

SPEAKER_00 4:31

Wow. Yeah. Wow. I'd never I actually never ended up seeing any of the videos of it. And and before people sort of say, well, how did you get to that stage? Um, what I would say is that during the tenancy, the tenant did replace the doors when it was damaged, the window when it was damaged. Like constantly, this poor tenant was repairing things on a weekly basis. And it actually got to a point where it was like, this is actually really unfair in a way, because he's just gonna do it again. Like the the expenditure that she had to spend, and yeah, you sort of, and she did, but it sort of got to that point where like this is just not making any sense when it's just gonna happen again. Like, I would actually just rather the door be removed and then just do with it at the end, you know what I mean? So I guess that's an extreme situation of good tenant, um, good references, good situation. Um, sorry, uh not a good situation, um, but good tenancy, just a really unfair situation for her and what she um what she was coping with. So that is an example of a, I guess, I mean, I'll probably get crucified for saying bad tenancy, but for a um tenancy gone wrong. Tanancy gone wrong, thank you. Put it that way. You're much better at those words than I am. Um second property, uh second one we had was where the tenant had been in the property, I think for three years. This was one of Chelsea's, three years. Um, and within six months, he went through a psychosis. Yeah. And that property was also um I really left that was really left bad that had multiple skip bins. But again, like good tenant for three years, two and a half years, went through a psychosis. And that one got to a point. I don't know, did you know this? Did you know that when the contractor went to the kitchen and he actually threw up in the kitchen? Did you know that? Yeah, Chelsea told me. Yeah. Yeah, like that's how that's how bad it was, yeah. Which I shouldn't laugh about. That's really bad. Um, but that was another big claim, yeah um, which was resolved. Um good tenants, so it's up until that point.

SPEAKER_01 6:36

And and to look back as well, yeah, it is sad because, you know, as the landlord, you might have a great tenant for years and you're happy with them, you're happy with how the property is performing and and ever all of that. And to then have it change so drastically, it can really, it can shock you because you don't understand, you don't understand what's gone wrong. So for the property manager's side of it, where we do unfortunately see this, we kind of have that extra context or understanding, uh, but not typically until towards the end. So if the tenants were able to talk to us and we do try and offer as much support as possible. So if we know that people are going through financial hardship or maybe some more personal issues, we try and point them in the right direction of resources that can help them. But so often they just don't feel comfortable talking to us about it, or maybe there's an element of shame and they just bury their head in the sand until it gets to the point where it's too far gone.

SPEAKER_00 7:28

Yeah, that that's always the way. I had a good situation that turned around um a few years ago, and it was someone who just didn't have any contact with us, had to go through the process of the breaching and um determination in the court. And it was not till the very, very end, and it was because I didn't want to get a bailiff and spend even more money getting a bailiff out. And I remember speaking to him, getting hold of him, and he actually said, he goes when we got chatting, he said, I regret not speaking to you earlier. Um and it was the conversation we ended up having was, listen, I know that you've gone through some financial stress. That does happen. I get that. Um, but you also now have a choice of how you leave that property. And I actually did say you can you can be an asshole and leave it bad, but that you know, literally cost you nothing to remove all your stuff and to clean the property and do the right thing from a behavior point of view. The rent arrears I can deal with separately. Um, and I booked in a cleaner just in case for the Monday. And I swear to God, I went to go do the final on a Monday. The place was spotless. Oh, wow. Everything removed, cancelled the cleaner, and then it was just a simple insurance claim for the rent. But what's really good about this story is that I can now moving forward for a reference for him is I would say to someone, listen, the tenancy ended like this. However, he went through financial um problems, didn't pay his rent. Yes, it was he was evicted for that. However, he did the right thing and he left the property empty, clear, gardens done, um, cleaning done. He actually had his family do a busy B. Um, and that to me is something that I can work with and something that a property manager would work with because that's that's the choice. The rent arrears, I sometimes understand that sometimes that's actually not it's out of their control. It's out of their control sometimes. That's right. And but yeah, cleaning and emptying a property, there's no excuse for not doing it. So that's where my tolerance level gets really uh a bit shirty at people that don't do that. Yeah, I agree. And don't you think as well, like from a property manager's point of view and from an owner's point of view, that's the most complicated part of tenancies that end badly is when they're left. Like, like rental is is so easy to deal with. But that, you know, when they leave belongings, clean up, like damage. Do they want this stuff? Do they not want it? Do you throw it out? Do you remember that one that we had um where he absconded? He actually ended up driving over to um Pamelia, I think. He drove over to Queensland and the place, he literally left the whole place. Yes, I remember this. Do you remember that? Yeah. And we had someone go with it. The lights were left on. The lights were left on and someone went in there, or it might have actually been somebody that went in there and said, Ash, I just don't feel comfortable emptying this property. Like there is literally photos, like like personal belongings. Like that's that's actually he left

Notices Court And Bailiff Reality

SPEAKER_00 10:23

everything. That's actually that's that's a harder ten, you know, a harder one to deal with because when tenancies do end badly, so I guess we'll go into the protocol of that, which is going to be different for each state that you're in, I would imagine. Um, so really what happens is we have um you depending on why you're evicting them, uh, whether it's rent or jammage, etc., you go through the process of vacate um terminations and breaches, and then you get to the vacate day or the end of those um those notices, and then they don't return the keys. And then you have to go to court. And how long's court taking these days?

SPEAKER_01 11:02

Oh, at least three weeks for a day. Yeah. It depends on which court. Some of them are are a bit quicker. Yeah. Others you can wait up to four weeks for a hearing.

SPEAKER_00 11:08

So then you get that hearing in four weeks. Like you literally can't do anything to you got that because you have to have permission from the tenant or confirmation that they've vacated, basically.

SPEAKER_01 11:18

And we can't just go in and change the locks. No, as much as we would like to sometimes. There is legislation, there's processes that have to be followed. And honestly, I've had that question so many times over the years. Can't you just go in and change the locks?

SPEAKER_02 11:29

Yeah.

SPEAKER_01 11:30

Imagine if we could do that. That would just be Yeah.

SPEAKER_00 11:33

I think you can in commercial, can you? Can you? I think you I think you might be able to. Yeah, yeah, don't quote me on that, but I think you might be able to. Um, the and then so ideal, like in an ideal world, if a tenant could just simply just message to say vacated keys on site or even vacated lost keys. Like, yeah, don't care. Give us anything. Just give us anything. That's right. Just just just give us that because that saves us. It just means that we can move on with the property and not have to go down this formal process. So then what happens is you get your vacant date, vacancy date, and then you wait for that date to come along because you haven't heard from the tenant, the vacate date turns up, you the the court approved vacate date. They still haven't vacated, but they could still be living in the property as well. So you don't know at this stage. So you then have to order a bailiff.

SPEAKER_01 12:22

And this is the part that this is so frustrating. Is I sat with one of the property managers last week to go through the process. She hadn't applied for a bailiff before. It's not an easy process. There's certain documents that the owner has to sign. We can't act on their behalf because it's a civil document. And the whole process costs over $800 to the owner. So this is where it's so important to have good landlord insurance. But it's also something that people don't realise is when it comes to ordering a bailiff, uh, it's charged per uh person at the property or per tenant on the lease. So if you have five tenants on the lease, you'll be charged per person. Each journey. Yeah. When do is that new? Uh as long as I've been doing it. Wow. Maybe I've only ever evicted one person. So I like when you actually look at the breakdown of costs when you're ordering the bailiff, so it typically starts from about $800 anyways, but the actual, they call it the delivery cost, if you add multiple tenants, it's uh it's per person on the lease agreement. There you go. So I've had bailiffs that have cost over $1,200 because there were, I think at that time it was four tenants on the lease. And then I don't know about the travel cost. The last time I checked it, um, they also charge based on how far obviously the property is from the bailiff's office. So if you've got a property that's really far away and you've got multiple tenants, you can be up for a massive cost. And that's just to get them out in the first place. That's before we've even gone into the property and seen what state it's in.

SPEAKER_00 13:46

Yeah. So a bailiff goes out to the property, um, and they're the ones that actually remove the person or the tenant from the property. Um the um, and and I guess one thing probably it's important to know is the property manager during this whole process, like you're not gonna know, but I can promise you they've been trying lots of different tactics, SMSs, phone calls, emails, calling emergency contacts. Just trying to get that, yes, we've vacated. Like literally, that's sort of all we need. That's right. That saves you a lot of money. So yeah. So don't think for a minute that we haven't actually tried that. We we all all property managers will have done that. And then you get to the property.

Lock Changes Skip Bins And Cleanouts

SPEAKER_00 14:30

And now I've actually got a bit of a weird thought when it comes to tenancies that have gone badly. I actually weirdly think that it's easier to deal with a trash property than sometimes normal tenancies. Because don't you think that sometimes, like when it's like ended badly, it's just easy. You don't ask anyone, you don't call the tenant, say you missed an exhaust fan, you and then you argue about whether that was dusty or not when they first moved in. There's way less back and forth.

SPEAKER_01 14:58

Yeah, you just do it. It's very clearly damaged, it's very clearly dirty, whatever it might be. It's more, it's more black and white almost. There's yeah, there's no um negotiations in the middle over cleaning quotes and things like that.

SPEAKER_00 15:10

That's right, that's right. So weirdly, I just think it's just then a process. And so the process is you've got the locks change, also expensive. I add and then um when that's done, you would then generally in a in a bad situation, you get your skip bins. Um, property managers will weigh up whether it's worth having skip bins or whether it's worth having um a handyman with a trailer. Um, what we probably should mention now is that sometimes owners at this stage, if they're local, might go, well, I'll go in to do it because they don't have insurance. Yeah. Um, if you want to mention that.

SPEAKER_01 15:52

We've actually had uh one of our property managers, Lisa, has been on the weekends out at properties in her, you know, her throwaway painters sort of clothes that she doesn't care if they get dirty, and she's been hands-on helping owners clean out a property because they didn't have landlord insurance. Yeah. And already, I think the cost for that property was already sitting, they were more than four or five thousand dollars out of pocket. And she just couldn't bear to tell them there was gonna be this extra handyman cost on top of that. So she worked together with them and spent her whole weekend there helping clear out that property into a skip bin.

SPEAKER_00 16:24

Which, if they had landlord insurance, could have been avoided. Yeah, and when you do it yourself, you can't claim that. So you can't do it and then claim that on insurance. It would be literally because you don't have insurance and it's gonna be an out-of-pocket expense yourself and you're just gonna have to bear the cost. I'm pretty sure I offered my 15-year-old son to help her with that one. I think that's a different one. Oh, a different one. Okay. Because I did say I do remember that as well. Because I was like, I'm pretty sure that I can pay George only 50 bucks an hour and he'll like actually well, actually, no, not maybe not 50 bucks, maybe 20 bucks an hour. Thinking, well, he's getting paid. No, no, no, not 50. Um, but I think I did say to her, listen, and I don't even know if I'm allowed to even say that. But I was like, I'm sure he's got a couple of friends that wouldn't mind, you know, 100 bucks a day each. Like, I'll pay for them. And they just literally have to put stuff in the skip in and empty it. But this is the thing, property managers do so much behind the scenes that you wouldn't even know about. Like, you know and and and I'm not saying they should, because they shouldn't do it, but they do.

SPEAKER_01 17:20

So and people just don't realize. They don't realize I don't know a single property manager that doesn't have a cleaning kit in their car. Yeah. Like they've got I've seen some that have little mini handheld vacuums to make sure that like the property still stays clean in between, you know, if you've got a tenancy changeover and maybe it's a couple of weeks between tenancies, things can get dusty. So they've got some rain and wipe, they've got um, I used to have like a grout cleaner in my car and a and a little scrubber brush, uh, trash bags, like the all of it, because they don't people don't realize how many small little things, like if you're doing a final inspection and the only thing that's wrong with the property is that the cupboards in the kitchen aren't clean. You're not gonna go and send a cleaner in and charge the tenant, and you're also not gonna bother sending them back just to wipe over the cupboards. You're just gonna do it yourself. It's much quicker. Makes the whole process a lot smoother. But people don't realise how much behind the scenes stuff there is.

SPEAKER_00 18:09

I think, and I think there is part of that where it's like it's easier for me to do it. But there's also um times where I'm like, I literally can't be bothered arguing with anyone because I know they're gonna want to argue with me, like whether it's a tenant or an owner. I can't be bothered for that. You know what? I'm just gonna do it myself. And it's a shame that we've had to go down that road. But unfortunately, there's a lot of you guys that are very hard work to deal with and to keep us mentally sane, it's just easier for us to not even argue. Like we don't want to argue over it either. Um, so that's I guess a little bit of a mindset that sometimes we have.

SPEAKER_01 18:47

Um something else that kind of comes to mind is in the past I've had tenancies that I took over from another agency and they either didn't have an ingoing property condition report or there were in entire areas missing. So when it came to the final inspection, I didn't have anything to hold the tenant accountable to. So it's it's not just that, you know, maybe it's not worth the I guess conflict part of us sending the tenant back. It's that we physically didn't have a leg to stand on to send them back. So either my my two options were I either did it myself or the owner was out of pocket for that cost. And that's not fair on the owner either, that the previous agent hadn't done their job properly. Yeah. And that's when I ended up, you know, pulling weeds and on my hands and knees with garden gloves on.

SPEAKER_00 19:30

Yeah, yeah, yeah. I know. It it's hard. I mean, every every property manager's done it, and I guess that's why you have a pro property manager look after your property because they will, these are the things that happen behind the scenes that you'll just never ever know

Resetting After A Bad Tenancy

SPEAKER_00 19:43

about. Um, can we just quickly touch on the um the mindset of a landlord with regards to how can a landlord move on when they have had a tenancy that's ended badly? How can we make sure that they don't um blame future tenants for this experience? Like, so for example, like I just feel like every tenancy deserves to be reset because they're not the last person. Like, and sometimes what we can find is that landlords want to completely scrutinize, not trust applications, maybe not even trust the property manager because you know they've they've been burnt um before. So, how do how, I mean, I don't even know if there's an answer to it, how can owners um reset their mind, brand new tenancy, brand new situation, move on from the emotional and financial stress that that caused and not let it affect their ability to maintain that, um, to um sustain that property?

SPEAKER_01 20:50

Well, it is hard. And I have had these conversations with owners, especially in investor audit conversations, where I've been aware, you know, that that one with the tenant that had a psychotic break. I actually recently spoke to that owner to do um her audit for having gun properties. Good. Yeah, good. But there's obviously still like when you have something that happens, or even I had there was another uh property where uh we had the the pipes that burst, the BGC ones, and it completely flatted the property. This was down in Secret Harbor. And so those owners, same thing. Like they had this property that they'd freshly renovated and they was, you know, were ready to release, and then a pipe burst in the ceiling and flooded the house, and we had to start again. So um, and both of these conversations with these owners were on the same day. So I felt like I was having this discussion um, I guess, a lot that day was uh we understand that you have gone through emotional stress with this property. And we understand that um you're gonna be apprehensive about what happens moving forward. So for the, you know, for the owner where the pipe had burst, that was of no fault of anyone's. But the owner where um the tenant had had gone through that episode and had damaged the property so badly, it was really just about. Speaking to them and making sure that they understood what processes were being followed out on our end to do everything in our power to make sure it doesn't happen again. So, like we said, that tenant was a great tenant until he went through that. There's not much that we can do about it when it gets to that point, other than just make sure that we're doing our job. So that's the application vetting, our regular routine inspections. As soon as we do start to notice little red flags like rent arrears, invoice arrears, things like that, picking up on it straight away and also just keeping that open communication. So for those two owners, I just said to them, look, I'll have a chat with the property manager, make for each property, make sure that they um are just keeping that open line of communication moving forward because there's really not much you can do as an owner yourself to move past it other than just accept that this is a risk that you take with property investing.

SPEAKER_00 22:50

Yeah.

SPEAKER_01 22:50

And then making sure that you have landlord insurance so that if it does happen again, you're covered. But as long as that property manager understands, they can, they can, I guess, navigate the management of that property with a little bit more care or a little bit more of a high-touch approach because they understand the context of we've had a lot of issues with this property before, with you know, where maybe an a different owner might not care about little small things that they've picked up on. They understand that for this specific property, the second that there's any sort of red flag or the second that they might need to be um having these discussions, just making sure that the owner is kept in the loop throughout that process.

SPEAKER_00 23:26

Yeah. I mean, it says a lot like where clients have stayed with an agency through that because they've been supported. Um, the property manager's given them that the right support was it was fully in control of sorting out that issue and taking as much stress off the owner. So the fact that they are still, you know, um being managed, the owners have still kept their properties is a really good sign and they just have to rebuild that trust. It uh reminds me of like, you know, you could have a really bad personal relationship and then, you know, you're still gonna go date again. You know what I mean? Like it's just like you can't let it, but it does give you that little bit of a like puts little boundaries up, I guess, when things like that have happened to you. And one probably the one thing that I do notice the most is where it the um the mindset comes into the next tenancy is sometimes with the applications. So not that um at any point, you know, owners can discriminate, but if you have had a, let's say, a bad experience with a um group of young boys or a group of young girls, then you are and you get an application for a group of young boys, or maybe it's the single, um, the single person, like whatever it is, you're gonna be very hesitant to repeat that again. And that's a very normal behavior to to have in your mind. But I it you just want to make sure that you are reflecting on that and not letting you not letting that bad tenancy um impact the potential of the property. So, like, I mean, and every owner has different um ideas. So, for example, in a single tenancy, they and where this person did go through a psychosis and and lost a job, for example, someone might be hesitant to take on a single person because they've got no support at home. For example, like they might prefer the family. Because sometimes in my history is I found that uh country boys and country girls, there's a big difference. So country girls can sometimes cause you more problems than what a group of country boys. Okay, interesting take. Do you know why? Well, number one, because of my experience and my experience of it. But um, the main thing is that the country boys always have their mums come up to do their um to do their clean for their routine inspections. And those, because they in their mind, they sort of think, oh, you know, maybe boys get judged a bit more. So the parents are more like, I don't know, mothers just seem to look after the boys a lot more when they're out independently in their own. And especially like when we I'm talking about students, you know, coming out from the country, parents are paying the rent, but I don't know. I feel like the parents nurture them more. We're with a group of girls, they let them a little bit loose.

SPEAKER_01 26:09

Yeah, and they assume that they're doing the right thing.

SPEAKER_00 26:11

Correct. They give them more trust. Where so, like from so from history, like if I was presented, for example, with an application with three uni boys and three uni girls, I would actually be more inclined to go with the three uni uni boys. Very interesting take. I know, I know. Is that it right that I can say that? I don't know, we'll see.

SPEAKER_01 26:30

Okay, we'll see if we get any hate for that. But I guess, yeah, is it but that's how like you know, we we do have those yeah, history. Yeah, it's history, it's experience and and context of these things as

Protecting Yourself Next Time

SPEAKER_01 26:41

well. Um, but look, at the end of the day, investing is a risk. It's like if you are investing in stocks and and ETFs, you're taking a risk. Property investing is just as much of a risk, so you just need to be aware of what's involved and make sure that you protect yourself as much as possible with things like landlord insurance um or barclays. We always recommend barclays. I can't remember how much it is off the top of my head. Like 77, I think per year. Yeah. Less than a dollar per day. And that is a debt collection subscription that protects your asset. So it's just being aware of the risks coming into this and then making sure that you are engaging a property manager that you trust and you understand has the experience to deal with these situations and make sure that they are really good at their open communication as well. So if anything does happen, they're just making sure that you're kept in the loop.

SPEAKER_00 27:32

Don't make decisions on selling when you're already feeling emotional upset. Yeah. It's a knee-jeck reaction. Exactly, exactly. Amazing. All right. Okay, great. Wonderful, thank you.