Finding a Good Tenant

Quote in 2 Mins
Retrieve a quote »

If you own an investment property, then there's a pretty good chance you'll want to look after it as best you can. Perhaps you want to keep it in great condition so it can continue to earn you money, or you might want to save it for your children. Whatever the case may be, you need to take care when deciding on the kinds of tenants you want to place in your house. The wrong kind could end up costing you more than you'd ever thought possible while the right kind will look after your property like it was their own. It doesn't matter where your property is located - in a less expensive area, or the most exclusive postcode in the city - a bad tenant could be your undoing and prove almost impossible to evict. How do you find the right kind?

New Tenant

Treat the process as you would an interview for a potential employee. Do they show up on time, and are they respectful. While the old adage is true and you can't judge a book by its cover, you can infer that someone who is unkempt probably won't take care of the lawns or gutters. True, you can't turn down everyone that turns up bearing tattoos and piercings, but if they're neat and tidy, it is a huge plus. Make a time for people to inspect the property and those that don't turn up don't make your list.

Ask questions about the kind of job they have - it's crucial to know if they can afford to pay rent, and pay it on time. But also talk to them to gauge whether or not you like them. Your instinct is usually true, so trust it.

Ask for references from previous houses. And, ring themi. Speak with real estate agents to determine if the person has a poor record. Call the owners (if available) and ask them their impressions. Why is the tenant leaving, and does the landlord's version correspond with the tenant's? Did they pay on time, and did you refund their bond in full (if not, why not)?

Call their work and check that they are actually employed, and how long they have been there. Have there been any changes in their performance at work? What kind of work do they do? What hours do they work? You don't want someone bringing home old car wrecks to leave on the lawn for months on end, or someone that leaves for work on a Harley at 3am.

Couple Moving In

Have the prospective tenant fill in a Tenancy Application Formii. Make it a rule that they must fill it in before you will consider them. They must answer all questions and provide details as required. This will enable you to compare applicants on paper. While you speak with them, form an opinion and write that down on their form when they leave. This will help you remember them later on when you're going through the forms.

Your investment property is just that - an investment. You put money into it in order to get more money from it, and if the latter doesn't happen then it's not an investment. Look after it in the first instance by choosing who lives in it wisely. If all else fails, contract the services of a property manager, but with a few simple steps this should be unnecessary.

Once you've found tenants, be sure to protect your investment even further by taking out landlord insurance which will cover you for accidental damage to the building as well as contents insurance should you be renting out the property furnished.