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In This Video:

00:13 What is a bad tenant?
01:05 How to avoid bad tenants?
01:50 How to protect ourselves form bad tenants?

Good day everyone Daimien here again and today’s blog video is about bad tenants or more importantly how to avoid bad tenants.

What is a bad tenant?

2 personal qualities of a bad tenant:

1. Lack of respect for authority (i.e. I signed a lease and don’t comply with it)

2. Lack of respect for other people’s possessions. (I rent your investment property and then I trash it. So have no respect for the fact that your possession is worthwhile.)

If I have those 2 qualities, what sort of person am I and where am I living? Those qualities will affect other aspects of my life like my employment and I say this very carefully “Poor people are not necessarily bad tenants” In fact, the great majority of poor people are good tenants, but I tell you this “The great majority of bad tenants are poor” so I’m making a clear distinction there “the great majority of bad tenants are poor. “

How to avoid bad tenants?

1. Stay away from the lower end of the market because the qualities that make them bad tenants are the same qualities that stopping them from getting highly paid jobs

2. Make sure that your rental manager loves you. Send them flowers every year, always be nice to them, and really lavish them with praise because they will have an eye for who’s likely turn out a bad tenant and who’s not, they check the history and things like that. And if your rental managers love you, they are not going to do that to you. But if you are a jerk and you are always giving your rental manager a hard time they just might put that tenant into your property instead of someone else’s.

How to protect ourselves form bad tenants?

2 things to protect ourselves from bad tenants:
1. We need to have a large cash buffer
2. We need to have landlord insurance.

Why a large cash buffer? As soon as you’ve got a tenant who’s not paying the rent, you need to evict them straight away, that takes time. And also if they had trashed the house you can’t rent the property out immediately anyway because you have to do the repairs. If you’ve got the cash in reserve, that cash will absorb the blow of not paying the rent and allow you to immediately fix any damages they’ve done the moment they move out, so you can get a new tenant and they are paying the rent straight away.

The insurance policy is the second thing we do, but it will move more slowly and it won’t pay out straight away. So we use the cash to fix the problem and then we claim against the insurance policy to be reimbursed for our cost.

Now there some great landlord insurance policy out there that protect you from bad tenants’ behaviour, vacancies that are no further of your own and things like that so make sure you check those things up.

So in summary, don’t buy the lower end of the market, make sure your rental manager loves you, maintain a good cash buffer, and make sure you’ve got a landlord insurance.

That’s it for me today, make sure you share it, and comment below, or like the post and until next time. Catch you later.

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