Property investment is a licence to make money, right? Yes, it has been a good way to build up capital for many thousands of landlords.
It's not easy, however — the money doesn't just grow on trees. Dealing with tenants is one of the biggest banes of many landlords' lives. Many break the rules, break things, or call in the middle of the night complaining about plumbing or rats in the roof.
In 2013 there were 45,093 applications nationwide to the Tenancy Tribunal, of which 41,496 were from landlords.
The top three issues were 27,551 applications (61.1 per cent) for rent arrears, 7,597 (16.8 per cent) for breaches of the tenancy agreement and 2,958 (6.6 per cent) for compensation for damage.
Of course this isn't all one-sided. There are plenty of slumlords who never do repairs and fail to give proper notice before entering the property. But in this article I'm looking at landlord gripes for those people who think investing in property is easy.
Prospective tenants not keeping appointments is one of landlord and property manager Cassandra Palmer's main complaints. She arrives at the appointed time and no one turns up. That's a waste of valuable time.
Landlord "sheree99" posted on Trade Me amused that tenants who don't turn up to agreed viewings sometimes ask for a second chance. "I always find it amusing that people don't realise that we are deciding it they would make good tenants from the very first communication we have with them. Make a bad impression on first contact and you go to the bottom of the list."
A common complaint about tenants is that they smoke on the property despite accepting a non-smoking condition of tenancy. "They then proceed to smoke non-stop and cover the walls, ceilings and curtains with nicotine," one landlord complained. It's hard for smokers to find tenancies and some will be tempted to lie.
Landlord "Toasty" posted on the PropertyTalk.com website complaining that a tenant set his apartment alight by falling asleep while smoking — even though it was a non-smoking tenancy.
A similar problem is tenants who secretly keep animals in a pet-free property. Dogs and cats damage properties and many landlords — even pet-loving landlords — ban them. Why take the risk when other petless tenants are available?
Landlord "jbsouthland" posted in Trade Me's community forums that two tenants in a row sneaked in dogs that damaged railings, carpet, net curtains, outdoor furniture and the door of a bathroom where the dog had been kept during the day.
One landlord who won't be renting to tenants with dogs in a hurry is "seaqueen" on Trade Me. "Turning up to a property that you've let in pristine condition to find dog sh*t all over the yard, dog hair inside the house embedded in the carpet, scratch marks over the interior and exterior doors, a pervading smell of dog inside the property and burnt patches of grass where the dog has been peeing tends to make one think long and hard before re-renting to dog owners."
Landlords sometimes say the Tenancy Tribunal adjudicators view damage done by animals as wear and tear. As seaqueen said in reply to a Trade Me member looking for a pet-friendly property: "As a landlord, I cannot charge a pet bond and the Tenancy Tribunal generally views damage done by pets as being within the 'fair wear and tear' category — in other words, 'tough luck, landlord'."
Tenants who claim to have paid the rent but haven't are not uncommon. They say they've paid the rent, but it doesn't appear. Cheques are less and less common these days. They used to be a nightmare for landlords because of their habit of bouncing.
Tenants often don't have the resources or financial skills to keep up payments, which can prove problematic for landlords who have to pay the mortgage at the end of the month. It's not unusual to see complaints from landlords that tenants are thousands of dollars in arrears. Some may recover the money but many simply lose out.
Tenants who sublet or fill the property with friends and family are a bugbear of some landlords. The greater the number of people living at a property the greater the wear and tear.
It's not uncommon, says Joe Schellack, general manager at Crockers Property Management, to find extra beds or mattresses tucked away and more toothbrushes than expected at a property.
Landlord "Mubarak" complained about this on the website Landlords.co.nz. The tenancy agreement had a maximum number of occupants that had been exceeded. Mubarak asked the tenant to remove the extra people or pay more rent. She refused to do either.
Some tenants simply don't know where rubbish is meant to go or what a rubbish bag is. It's not uncommon for landlords to find piles of rubbish on a property when it's vacated. If, however, left belongings could be worth something the landlord must store them and make contact with the tenant.
Real estate agents are a necessary evil for people who buy property. Some landlords complain bitterly that the agents never tell the full truth. A common complaint is that real estate agents talk up the amount of rent a landlord can get. If the real rent is lower and the property doesn't break even the landlord will make a loss.
Tenants who fail to report small problems are Mark Trafford's biggest gripe. "I provide really well presented and maintained properties and (some) tenants don't take care of them or treat them with respect," says Trafford. "This in turn causes major damage and costs. Small maintenance issues such as leaking toilets or pipes that can be easily fixed end up costing me thousands of dollars because the tenants don't bother letting me know there is a problem in between property inspections."
Landlords often complain about the Tenancy Tribunal. "One of my greatest gripes," says Hibiscus Coast landlord Ron Goodwin, "is the unjust way in which landlords are sometimes treated by the Tenancy Tribunal."
He claims one Auckland adjudicator refuses to read landlord applications, won't allow landlords to present a verbal case and refuses to allow landlords to answer specific questions. "I have an appeal lodged [with the district court] against a blatantly wrong decision with totally incorrect facts that weren't even mentioned in the hearing and wherein the adjudicator cut off an honest attempt to speak and answer questions 36 times during the hearing as confirmed by the written transcript."
Even if the tribunal hands down an order in the landlord's favour, it can be hard to get money out of tenants. The inability for the system to effectively hold judgment debtors to task is Keys Kerdemelidis-Kiesanowski's pet peeve, which he posted on the PropertyTalk.com forum. Landlords can chase through the district court and use bailiffs, but it's an expensive long-winded process.
Donna Richardson, who runs PropertyTalk.com, says her biggest gripe as a landlord is needing to remind the property manager to apply the yearly rent increase. "For some reason I have to always remind them and usually that's after the year is up and then there's the 60-day notice to [increase the rent]."
Landlords who don't want problems often contract the task to property managers for about 8 per cent of the rent. Even that can turn out to be problematic. PropertyTalk and the Trade Me forums often have threads started by landlords moaning about property managers.
Whatanenigma complained on Trade Me that a property remained empty for seven weeks because the property manager took awful photos and wrote just two sentences in the online advert. "I insisted the pictures I had sent through to her be used and I wrote a proper description outlining the best points and attributes of the property," wrote whatanenigma. "The properties rented within 10 days of this being done."
The same landlord specified that only tenants willing to sign a fixed-term tenancy should be considered. "Guess what I now have? Two tenants with periodic tenancies. Grrrrr."