You’ve finally bought your first investment property, and now you need to find someone who’s willing to move in, pay their rent on time, and take good care of the place.
Or perhaps you’ve been a landlord for some time, but you much-loved perfect tenant has decided to move on, and you’ve no idea how to find a suitable replacement?
Choosing a tenant is something that’s best left to the professionals, aka your property manager, for several reasons.
For a start, they’ll approach it like the calculated business decision it should be, not weighed down by emotion, as can be the case for owners.
Plus, this is their niche – they are experts at scanning application forms and searching databases, and matching the right tenant to your property.
Of course, you’ll want to discuss the kind of tenant you’d prefer with your property manager before they start sifting through applications.
So, what are some of the things they should be looking out for?
How frequently do they move?
If the prospective tenants change address more often than most people change their bed sheets, you’re right to be alarmed.
Unless there are extenuating circumstances, such as needing to relocate for a new job, you want tenants who’ve stayed two years or more at their previous rentals, as this indicates reliability and stability.
Is their job secure?
Tenants with long-term, consistent employment are more likely to be able to make their rental payments each month, and longevity in a job is another indicator of personal stability.
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Your property manager should be calling the tenant’s employer to verify the details they’ve stated on their application, such as the length of time they’ve been employed, whether they are full time or casual, and their regular earnings.
Have their bonds been returned in full?
If previous agents or landlords have needed to retain part or all of a bond, that’s a red flag that the tenants may have caused damage to a property in the past.
However, there’s also a chance the bond has been forfeited due to a less worrying issue – such as forgetting to mow the lawn before they vacated – so it’s always advisable for your property manager to call the last agent and check why they didn’t refund it in full.
Do the facts match their application?
Fibbing on an important document such as a tenancy application is not a good sign – it certainly doesn’t indicate honesty!
If your agent finds a few discrepancies between the details the tenant has provided and what their checks unearth, it might be better to find an applicant who is more upfront about their situation.
Are they in it for the long haul?
Families with young kids at school in the area or older, more settled couples are likely to remain in the property longer than a group of university housemates.
Sure, the kids might add a little extra wear and tear to the paintwork and carpets, but this will likely be offset by the savings you’ll make by not needing to re-let or advertise the property for a few years.
When you do find a great tenant, do everything in your power to hang onto them – they’re worth their weight in gold!
Instruct your property manager to attend to repairs and maintenance promptly, be reasonable and fair with rental increases, and little gestures such as a Christmas card never go astray.