The right tenants can make a good investment great.
Selecting a tenant for your property can be a stressful and confusing experience. At Image Property, we manage your property with care. This starts with the selection of appropriate tenants.
To make things simple, we have put together a 3-step checklist for landlords to ensure they select 5 star tenants.
Landlord Quick Tip #1
While filling a vacancy quickly does keep your cash flow moving, it is imperative that you select tenants who are capable of paying the rent, no matter the circumstances.
In considering your potential tenants, affordability is key.
At Image Property we advise that you ensure the rent is no more than one third of the combined income of the people living at the property.
While on paper tenants may look to have substantial income to cover the rent each week, it is often the case that their cash flow runs into difficulty when the bills start to roll in – car registration, insurance, electricity, water, even holidays.
In this case it is imperative that they do not approach their rental obligations as they would an interest-free credit card.
Landlord Quick Tip #2
Taking care of an investment property is not just a matter of paying the rent. It is imperative that you are confident in your tenants’ ability to maintain your property to the highest of standards and assess the suitability of their needs against those of your property.
When assessing tenant suitability, longevity is key.
Tenants who stay at a property for a prolonged period of time have a vested interest in the upkeep of the property, as well as contribute to an uninterrupted cash flow for your gain.
At Image Property we strongly advise considering the number of people who have applied to live in your property. For example, it is not ideal to have four people living in a two-bedroom unit as it inevitably leads to very high wear and tear. Likewise, pets inside a unit are not advisable and, in most instances, are more suited to a townhouse or house.
Landlord Quick Tip #3
When assessing potential tenants for your investment property, the best indicator of the future is the past.
A tenant’s ability to pay their rent and take care of your property can be evaluated with a thorough inspection of their rental history.
When assessing potential tenants, requesting two rental history accounts is critical.
At Image Property we recommend requesting two rental references from each tenant – one from their current rental property, and one from the property previous to that.
We always assess each potential tenant thoroughly however, the interests of their current landlord and our interests do not necessarily align, which can lead to some grey areas. Even if it is apparent that they have always paid their rent on time, it does not necessarily mean that they were great tenants.
A rental reference from the property previous to their current property is less likely to hide any information that may affect your decision. That landlord no longer has anything to do with your potential tenants and has no reason to withhold any information from Image Property regarding what they were like during their tenancy from us.