Category: Property Manager (2)

Written by Sally Norton for Vogue Real Estate Australia

Finding the right tenant for your rental property can be a daunting task. There is no surefire way to filter out the perfect tenant, but there are several factors you should pay attention to during the selection process that can help you find the right occupant for your property. How to screen potential tenants depends on what type of renter you are looking for as a landlord.

Families with small children tend to offer more long term stability and security but at the same time pose a greater risk of deterioration of the property than perhaps a young, career orientated couple without children. This means that finding a perfect tenant depends on many various factors, both personal and financial.

The screening process

There are several issues that landlords face quite commonly. To increase your chances of finding the perfect tenant, you should begin by ensuring that you advertise the property well. The larger the number of applicants, the higher the possibility that your ideal tenant is amongst them. No matter what type of occupant you are looking for, there are several steps in the screening process that you should go through to ensure you make the right choice.

A hand passing a set of keys to another hand with a house in the background.
There are several steps in the screening process that you should go through to ensure you make the right choice.

Create a checklist

Prepare a checklist of the things that are important to you. It can contain things like the number of tenants that will inhabit the property, whether they have pets, whether they are employed, and such. Also, make sure to ask for references from past landlords and employers. These are questions that you need to include in the rental application form. This will provide your first screening level and help eliminate unsuitable applicants from the get-go.

Do an identity-check

It might sound a bit over the top, but identity theft is a growing problem, and it can have serious repercussions. To protect yourself from losses, you should run an identity check. Find out how this is possible in your locality.

A person sitting at a table with a laptop and the words “Fraud Alert” flashing on the screen.
Identity theft is a growing problem, and it can have serious repercussions. Make sure to run an identity check on shortlisted candidates.

Past rental references

Once you complete an identity check, comb through the past rental references of potential tenants. Contact their past landlords or rental agencies and find out about their rental history. You need to be fairly specific with the questions you ask during this step, as they can tell you a lot about how they approach their tenancy. Familiarizing yourself with legitimate causes for evicting tenants is a good idea, so you know what the most relevant questions to ask are. Therefore, ask if they paid their rent in full and on time, if they caused damage to the property or if it was well kept.  Check what the circumstances were when they vacated the property they previously occupied.

Employment and income checks 

In addition to past rental references, you should also check their employment references to ensure the applicant is still employed at the same place they listed in their application. Check that the income stated in the application form is also the same. This serves as an indication of the potential tenant’s capacity to pay their rent. You can do this easily by asking potential tenants to submit at least two of their most recent payslips. Contacting their employer and having a quick chat about the stability of a potential tenant’s job position will give you an even greater idea of the reliability associated with that particular person. Keep in mind that surveys have shown that rent costs should not exceed 30% of the tenant’s income.

Check tenancy databases

You might not be able to check tenancy databases on your own. The property rental agencies in your locality should be able to do this for you for a small charge. It is a worthwhile investment. You will gain knowledge about whether a potential tenant has been blacklisted for any reason. Tenants can get blacklisted in tenancy databases if they cause extensive property damage or fail to fulfill their payment obligations. In either case, these are not the type of renters you want in your property. Therefore, this check will help you protect yourself from bad tenants. However, tenancy database checks are not free, so only check candidates that are on your shortlist. This will ensure you don’t spend money unnecessarily.

Don’t discriminate

As a property owner, it is entirely within your rights to chose a tenant who suits you best. But keep in mind that there are laws governing property rental that clearly aim to eradicate any form of discrimination. This means you are allowed to choose your favored potential tenant as long as no discrimination occurs.

You may not filter potential tenants based on their sex, religion, race, political views, sexual preferences, nationality, or similar characteristics.

Two pieces of paper with illegal written on one and legal on the other. You need to know how to screen potential tenants to ensure the process is legal.
Make sure that you do not discriminate.

Set the right tone

It is essential to set the right tone from the very beginning of the screening process. The property should be tidy and clean when you decide to invite potential tenants for viewing or interview. This will let applicants know exactly how you expect them to maintain the property during their occupancy. It might even be a good idea to refresh the space before having anyone over to give them an idea of what the place should look like after they move out.

It is also important to mention any specific facts or requests that you might have as the property owner. This helps ensure that the potential tenants are informed about what you expect from them exactly during their occupancy. You should ask whether the occupant is prepared to put down a full month’s rent and security deposit in advance.

Manage your property

You must manage your property efficiently and effectively. Letting your property slowly deteriorate and failing to fix problem areas can lead to your getting bad references as a landlord. This will make renting your property more difficult in the future.

If this all sounds a bit too daunting or time-consuming of a task for you, it may be a good idea to consider hiring a professional property manager who will complete all of these maintenance tasks. Furthermore, they can screen potential tenants for you, which will make your life way more comfortable. 

Used images:

https://pixabay.com/vectors/for-rent-sign-rental-signboard-148891/

https://pixabay.com/illustrations/keys-hands-own-buy-sell-home-1317389/

https://pixabay.com/illustrations/fraud-prevention-scam-corruption-3188092/

https://pixabay.com/photos/legal-illegal-choose-choice-1143114/

Written By Sally Norton for Vogue Real Estate Australia

Having rent coming in every month is a great way to add some more funds into your monthly budget. In fact, this is such a lucrative situation that some people have made it their mission to acquire as many rental properties as possible which will then be rented to potential tenants. However, if you are going into this situation with unrealistic expectations, you might find yourself disappointed at the end of the day. Especially if you haven’t taken any measures to protect yourself against bad tenants. 

Hey, these things happen. As a landlord, you will most likely have to deal with a bad tenant sooner or later (unless you have crazy amounts of luck). In that situation, you’ll need to come up with good solutions to solve the crisis. But one might ask you this – why look for a remedy for the situation when you can prevent it altogether? Whether you have just bought your first condo that you are thinking about renting or you already have a range of properties, take the aforementioned measures of precaution and you won’t regret it.

Never make verbal deals

This one almost seems too obvious of a mistake for anyone to make. Yet, you would be surprised to know just how many landlords rely on verbal deals – at least in the beginning. For starters, verbal deals never hold up in court. Should you have any problems with your tenants, you will basically be trapped with zero chance of winning.

That’s why you should not only sign a formal contract but also ensure that every tenant gets his/her copy of the agreement. The lease agreement should state clear rules, such as no smoking on the promises, the time frame when the rent is paid and so on. Just make sure the rules are clear to all parties – should they neglect a rule, you always have the protection of a lease working in your favor. 

Make sure your tenants provide sufficient information

You are not exactly offering a job but the person who gets your home for a year (or more) needs to be qualified. You need to ensure that they can afford the rent, for starters, especially if your property is located in a good neighborhood where the rental prices are steep. That’s why it is completely okay to request your tenant to fill out an application form. Only a few of the pieces of information your tenant should provide include: 

  • Social security number
  • Current and last two addresses (in pair with the landlords’ name and contact information)
  •  Sources of income
  • Major expenses
  • Information about the vehicle they own

Check the references your potential tenants gave you

Your potential tenants bothered to provide the pieces of information you requested. Great – now you have to do your part of the job. You need to call up every contact that was listed as a reference! We don’t suggest you rely too much on close personal friends of the potential tenants or even their current landlord. Who knows – the landlord might be eager to get rid of them, forming an unrealistic picture. The best references (or the truest ones, at least) are those that come from past landlords and past/current employers. 

Trust us – the knowledge you gain this way will be priceless. Some landlords find out that tenants aren’t responsible when it comes to paying rent. Others find out they are casual rule-breakers. And then there are those who learn that the easy way to disassemble your furniture is simply to let tenants occupy your house – that’s how extreme of a situation others have found themselves in.

Perform all the necessary checks to protect yourself from bad tenants

That’s right – you can probably guess what this means! This is the right time for a background check where you would look into the existence of a criminal record. Also, you want to perform a credit check and get an insight that will be of great help. Luckily, these days it is very easy to perform background and credit checks, so you shouldn’t have a problem with this. 

It goes without saying that you should let your tenants know you intend on performing these checks. The good news is that you might be able to weed out incompetent tenants this way. If they suddenly lose interest in your property after you disclose your intentions, you can rest assured they have a skeleton in their closet. You will be saved without having to lift a finger.

Be regular when it comes to inspections

One of the best ways to protect yourself from bad tenants is to simply keep a close watch on things. And that’s what regular visits to your property will do! You are legally within your right to perform inspections that will ensure your property is being well-maintained. Of course, that doesn’t mean you can just barge in and perform an inspection on the spot. That’s not how these things work. You need to give your tenants a weeks’ notice prior to conducting an inspection. 

But be careful – we always suggest you play it safe and check the local laws on what’s the legal way of performing an inspection. Better yet – consult with your attorney when forming the property rental agreement in the first place. They will be able to give you the best pieces of advice that will ensure your maximum safety. And that is the end goal here, isn’t it?

One thing is for sure – regular inspections will give you enough time to notice anything going wrong. You won’t have to wait before the problem becomes too big to address it. You can simply nip it in the bud. That will not only help you protect yourself from bad tenants but it will also help you maximize your profit. You won’t have to spend time or money on tenants that will turn out to be bad. If you notice them breaking the rules and not keeping your property in decent shape, you will be able to take the steps needed for them to vacate your premises.