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.
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.
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.
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.
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.