When a Perfect Rental Application Goes Wrong (A Property Investor’s Worst Nightmare)

At BISE Property, we pride ourselves on conducting some of the most thorough renter application processes in the business. But even with all the right checks in place, there are rare situations where things can still go very wrong. And fast.

Recently, one of our properties, secured by what appeared to be impeccable renters, revealed a shocking reality at the 10-week inspection. Despite flawless rental history and glowing references, we discovered the property had been turned into a drug grow house.
‍

The Discovery: A Routine Inspection with a Shocking Twist

The renters were due for their first routine inspection at 12 weeks, but early concerns prompted us to bring it forward. What we walked into was every investor’s nightmare. There was extensive damage, illegal modifications, and clear evidence the home was being used to cultivate cannabis.

According to RentCover: “If a property has been used as a cannabis farm, the investor is likely to be left facing some serious damage – growers of any kind need to water their crops and the easiest way to do that is usually to cut huge holes in the ceiling and run water into the rooms.”  

This is exactly what we walked into at this inspection.

What was particularly disturbing was that the renters themselves never actually moved into the property. Instead, they had been paid $40,000 by a larger criminal group simply to complete the application process and secure access to the home.
‍

The Insurance Shock

While we acted quickly to protect the property and inform the authorities, the financial impact to the owner was compounded when we uncovered another unpleasant surprise. The investor’s insurance policy, held with AAMI, did not cover drug use or illegal activities.

This meant the investor was left without coverage for the extensive damage, despite doing everything right from the outset. It is a heartbreaking situation and a timely reminder of the hidden gaps that can exist in insurance policies.
‍

Key Lessons for Property Investors

If there is one thing we have taken away from this experience, it is that even with the best systems in place, property investment comes with unavoidable risks. Here are the key takeaways for all investors and investors:

• Early Inspections Matter: Wherever possible, schedule an initial inspection within the first 8 to 12 weeks of a new tenancy.
• Review Your Insurance Carefully: Not all investor policies are created equal. Check that your coverage includes protection against malicious damage and illegal use.
• Stay Vigilant and Partner with Experts: A skilled property manager will not just place a renter and walk away. They will stay engaged, monitor red flags, and act quickly if something feels off.

A Note on Resilience and Community

While the situation was deeply disappointing, it also reminded us why sharing these stories with the wider property community is so important. As investors and managers, we are always learning. Sometimes hard lessons are the ones that lead to even stronger practices and protections.
‍

How BISE Property is Moving Forward

Following this experience, we have:

• Introduced earlier first inspections across all new tenancies.
• Built stronger partnerships with insurance brokers to guide our investors towards more robust policies.
• Tightened our already rigorous renter vetting process, looking for new warning signs that might otherwise be missed.

We want our clients to know that we take incidents like this seriously, and we are committed to continually refining our practices to better protect their investments.

Engaging a trustworthy and smart property management company is so important when investing in real estate to handle any unexpected problems effectively.

‍

Contact us at BISE Property now and take sensible steps early on to keep your investment safe.