Renting in Singapore, Getting Started

Top tips to save yourself from dealing with difficult tenants

June 1, 2016

So you think being a landlord is easy? Most people assume that being a landlord is the fastest way to earn a passive income – rent out a spare room or unit and collect rent every month, how difficult can it be?

Though it might be true that doing so can be lucrative, you will need to keep in mind that firstly, you might need to have some patience in getting a tenant as a result of the slow rental market.

Secondly, just like every other businesses, you have to consider the prospect of lesser than expected returns if you do manage to lease out your property. There are simply no guarantees, again due to the higher bargaining power tenants wield these days.

But perhaps the worst case is that you might end up having difficult tenants.

Being a landlord is much more difficult that most people would expect it to be, especially when difficult tenants come into the picture

Being a landlord is much more difficult that most people would expect it to be, especially when difficult tenants come into the picture

Imagine this: your tenant is always late on payment, has poor hygienic practices and has secretly kept a pet in the house. Before you know it, your once clean house is now officially a dump with soiled clothes piling up at every corner and claw marks all over the furniture. And don’t even mention the condition of the bathrooms and kitchen.

Not such a rosy picture now, is it? Here are some steps you can take to avoid dealing with difficult tenants:

Evaluate prospective tenants

Your priority as a landlord is not just renting your house out;  instead renting it out to a reliable tenant. Therefore, do not be in a rush to sign a tenancy agreement with the first tenant that agrees to pay you the proposed rent. Get to know him or her a little more and perform a background check.

It may seem like you are paranoid about the person living in your property, but being safe is better than regretting it later. Ask your tenant why they are looking for houses around the area – Is it because their office is nearby? If so, ask for their company name and do a simple fact-check. You can also ask whether his term of employment is of a set contract length e.g. 1 or 2 years.

If you are still uncertain, you can even take it one step further by calling up the company and asking. Doing this will put your mind at ease knowing that your tenant indeed has a job and is making a stable salary to foot his/her rent at the end of the month.

If your tenant is a foreigner (which they probably are), find out how long he or she has been staying in Singapore. If he or she has been working here for a period of time (more than 3-5 years), there is a higher possibility he/she is here to stay and will not decide to pack up and leave without prior notice.

You can also consider getting your prospective tenants to agree on a shorter-term lease at first, such as six months. In this case, you can observe the condition of your house after the “probation period”, then decide whether you want to continue leasing out your property to them.

Get insured against difficult tenants

While doing background checks and profiling prospective tenants may give you some peace of mind, there is still no guarantee whether they will behave badly or not once they move in.

Your best bet is to get a home insurance policy that caters to landlords, helping you reduce the financial impact of having difficult tenants. There are plenty of such policies available in the market, with some specially tailored to benefit both homeowners and landlords (ideal for those who stay in the rental property together with their tenants).

Once you are insured, your home and its contents are covered against losses or damage; for example, claiming a certain portion of repair works done on floors. Most importantly, the landlord insurance may safeguard you against any loss of rental income in the event your tenant defaults on payment.

Trust the professionals

Certain ground rules need to be established to ensure a pleasant landlord-tenant relationship. Be upfront with your tenant on your expectations. This will give them a clear idea of what is expected of them, and at the same time, providing a platform for both parties to iron out the details before signing the agreement.

You should also explicitly state in the contract and made known verbally to the tenant of all deposits that have to be made as well as other lease agreements. This will further safeguard you against difficult tenants who fail to take care of your property.

Landlords may also choose to engage licensed real estate agents to represent them when dealing with tenants. This is because agents can help in settling the tenancy agreement professionally with mutually agreed conditions and requirements stated clearly in black and white, minimizing any unhappiness or dispute that could occur.

One way to ensure that your property is in good condition without having to physically check it periodically is to incorporate the cost of maintenance into rental repayment. For example, you can ask for a higher rent and engage a part-time cleaner to clean the house on days that the tenant is at home. That way, you can be certain that your property is well maintained, and saves your tenants the hassle of doing the cleaning themselves.

Cut losses early

If you are unfortunate enough to get a difficult tenant who has a habit of delaying payments, it is advisable to communicate with him/her directly to and find out the cause of it. Remember, this need not be to the degree of an interrogation or loan-shark harassment.

If that does not turn out well, give difficult tenants an ultimatum to set things straight. If even that still does not work, you can either consider charging him/her more for every late payment or end the lease early by giving him/her the required notice period as stated in the agreement to vacate. Understand that at the end of the day, you are running a business and not a shelter.

In addition, consider arranging with your tenant to inspect the property every quarter or half a year. Once you notice something amiss, take action and correct it with your tenant on the spot. Having said that, you should also give prior indication of your arrival; never appear unannounced in the house to do a “random spot check”.

Understand that if you treat your tenant badly, not only is he/she more likely to leave at the end of their lease, you will also not be able to count on him/her to take care of your property and be honest with you about things like broken fixtures or leaking pipes.

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