Good tenants make owning a rental property a dream. Bad tenants make it a nightmare. Finding a great tenant & keeping them for as long as possible will ensure you have consistent rental income with minimal fuss.
So how do you ensure that the tenant you choose now won't wreak havoc for the next 6-12 months?
Finding the tenants - the first challenge
As a landlord you want to know two overarching things about your new tenant. Can they afford to continually pay the rent and are they willing to treat the property like it is their own. Fortunately there are some good telltale signs to help you tick both these important boxes.
When it comes to rental payments you need to confirm ability and reliability. Part of the application process will give you the applicant's income. Do a simple check as to whether this is in line with the rental amount you are asking for your property - put yourself in their shoes; if they’re earning $X and the rent is $Y, is it a reasonable portion of the income to pay.
You the need to sight a full tenant ledger from their previous property. This ledger shows all rental payments receipted by their previous agent along with their corresponding dates. Remember, property managers often get lazy with reconciliations & make mistakes - check the ledger against bank statements. This will determine whether rent was paid in full and on time throughout the course of the tenancy.
When it comes to how these new tenants will look after your property, a good indication of the care they take is whether the bond at their previous property was refunded in full - although this doesn’t tell the whole story of how they treated the property, it will give you an indication that they are diligent when it comes to caring for the property they live in.
Finding that perfect tenant is only the beginning. Your second challenge is to keep them.
Every time you change tenants you risk the property being empty. Sometimes for weeks at a time. This vacancy hurts so ideally the longer a tenant stays the better. You will also start to develop a level of rapport & trust with a long term tenant which can be confidence inspiring, particular for nervous landlord.
Start with their history - how long did they stay at the last property? Have they been at their current job for a while? Are there any plans to change their role? You will get a great insight into the applicant's stability through these questions.
Another key in retaining tenants is having a proactive approach - the bulk of property managers are reactive and inexperienced. One main cause of tension throughout a tenancy is when repairs and maintenance are not completed quickly and effectively. It’s inevitable that things go wrong with properties, but most items that do, can be preempted.
Finally, ongoing correspondence and a positive attitude towards tenants will help them feel comfortable in your property - there are a lot of tenant horror stories where agents have no regard for a tenant’s wellbeing. This affects retention and ultimately prevents the tenant from cooperating when it comes to gaining access, doing inspections & issuing increases, re-signing leases & sometimes even paying rent.