How to pick the right tenant for your investment property

How to pick the right tenant for your investment property

If you’re a landlord, choosing the right tenants is perhaps the most important decision you can make. Rachel Walsh, of Peter Blackshaw Queanbeyan & Jerrabomberra, explains what they look for when choosing a tenant and how to attract the right ones. “We always check their rental history for their past and current property”, says Rachel. “The history gives us an insight into what we could expect if we choose them as a tenant”.

1. Are they financially responsible?

The primary concern of any property investor is to realise a return on their investment. That means checking that the prospective tenant is willing and able to pay the rent.

“It’s not just about whether they have a high salary”, says Rachel. “We also want to see responsibility. If someone is young and hasn’t rented before, we will look at their payment history. For example, they might have a mobile phone contract so we want to see that their account is paid on time every month. We will also look at whether they have savings and a stable job. Some young people buy an investment property in a different state and then rent their own home, so we would look at that as evidence as well”.

2. Have they cared for previous properties?

“We need to see that the tenant is going to keep the property clean”, Rachel says. “We’re not worried if clothes are lying around or there are cups in the sink, but not cleaning properly can cause long term damage to the home. If the tenant doesn’t clean the shower, for example, you get scum build up or staining or mould which is really hard to get off later. Not vacuuming can cause carpet beetles which eat away at the carpet. Those sorts of issues matter, so we always check”.

3. Have they moved around frequently?

If their history shows that they’ve moved frequently, it’s not necessarily a black mark. “It depends why they have moved”, says Rachel. “Some people move around a lot for work, some people have been unlucky and the owners keep selling, some people have upgraded/downsized or had a relationship break down.

It’s more of a concern if they have moved a lot between private landlords and they have no proof of how they paid rent.  Or if they say they don’t have any references and have just couch surfed with friends for 20 years. You need to know more of the background”.

4. Are they flexible around maintenance?

“Some tenants might not ever miss a beat with rent”, explains Rachel, “but other things also need to be taken into account. It’s better to have a tenant who is reasonable about letting tradespeople enter when it’s needed. Many tenants only want tradespeople to come outside of work hours, which is convenient for the tenant, but it means paying out of hours call out fees.

We also try to find tenants who understand what is considered a property maintenance emergency. A tenant who rings up and reports that there’s a slight leak under the vanity, for example, is helpful, because we can fix it before any real damage is done. But a tenant who calls out a plumber on a Sunday night because a tap has a slight drip and incur out of hours fees, rather than waiting until Monday, can cost the landlord a lot”.

5.  Do they care about presentation?

“A run down property, where the paint is shabby or the carpets are damaged, makes people think that the owner won’t care who they put in”, Rachel says. “That works both ways. It means that people who don’t want to have to look after the property will apply, absolutely. It also means that great tenants will be put off If the property isn’t presented well. If that first impression is bad, they won’t apply, and the owner has lost out on a tenant who might be amazing”.

The condition of the property also affects tenant behaviour once the applications are in. “If a tenant moves in and sees that the carpet isn’t cared for, they won’t look after it either. If the property is presented well, the tenant will be more careful”.

Find out more about how Peter Blackshaw can help you find the right tenant for your property today. 

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