How do I make sure I choose the right tenants?

How to choose the right tenants

On average 30% of properties in Queensland are rentals.  Of that 30%, one fifth are self managed by the owner/s.  Are you a self managing landlord?

Over time, we have heard horror story after horror story of privately managed tenancies going wrong (and that's not  including the ones from ACA!)  We've heard of internal walls being painted black, electrical wiring cut, toilets filled with concrete, thousands of dollars in rent arrears and even fixed appliances being removed and stolen.

That said, not all privately managed rentals go wrong.  We want to use our expertise to help everyone, not just our clients, so here is our top 10 tips to finding tenant bliss!

1. It all starts with the ad - to ensure you get maximum exposure on the internet, always use professional photography with the most exciting shot positioned as your 'lead'.  Include the property address and the rental figure.  Make it clear in the ad what the features of the property are, and include the availability date, whether pets are allowed and the preferred lease term (this will save you answering these questions time and time again).

2. Don't hold an 'open' home - Displaying the inspection time and date on the ad means you have no visibility on who is planning to attend, how many people and if you need to cancel, you have no way of contacting everyone.  Instead, hold an inspection where interested parties have to email and register.  This filters out the time wasters and you know exactly who is expected to turn up.

3. Be early - Turn up to the inspection at least 20 minutes early, this will allow you to open doors/windows and turn lights on.  You will see who arrives early too  - often those that turn up early are well organised, have prioritised the property inspection and are likely to be reliable as tenants.

4. Removed shoes? It's a sign of respect to remove your shoes when entering a property.  Those that remove their shoes, or at least offer to remove shoes whether it's necessary or not, are likely to be the kind of people to look after your property.

5. Quick chat? Often those tenants that are particularly keen will make time at the end of the inspection to have a quick chat.  This gives you a valuable opportunity to get to know them a little before any commitment is made.

6. Application Process - Ensure you request a copy of the drivers license from all adults - front and back (Queensland) and enlist the help of a local property manager to conduct a tenant database check.  You must have the person's permission prior to conducting this check.  Having a database check conducted will give you peace of mind that there is no outstanding debt owed to a previous agency.

7.  Use the affordability formula - add up all streams of tenant's net income.  As a general rule you don't want the rent to be more than 35% of the net income.  Sticking to this rule can ensure tenants are not stretched and you minimise your risk of rent arrears.

8. Ensure you call the prospective tenant's employer (preferably a landline) to verify they are still a current employee.  Make sure you verify income with at least two recent pay slips.

9. History will repeat itself - ensure you sight a rental ledger or bank statement which shows consistent, rental payments being made.  This is one of the most vital pieces of evidence you should always be happy with before you offer someone a lease.  If they have no evidence of how they have paid rent in the past, it increases your risk of arrears.

10.  Gut feel - a certain proportion of tenant selection is down to instinct.  It's important to feel the tenant will be easy to communicate with, that they will be reliable when reporting repairs and they have respect for you and your property.

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