Purchasing property as an investment can provide a steady stream of income over a number of years. Once you have found the perfect property; the next step is to rent it out to reliable tenants. Choosing the right tenants is really important. You will want to find individuals who will not only be able to pay the rent on time, but who will also take care of your investment property as if it was their own. With a tight rental market, it’s common to receive hundreds of applications, which makes finding the right tenants a daunting task.
Many landlords choose to turn to the services of a property management team or real estate agent in order to find and secure good tenants. You’ll find a multitude of experienced agents at LocalAgentFinder that may be able to help you with all of the complicated aspects of renting your property – you can register your property here. In the meantime, the following tips can also help you in your search for ideal tenants.
Attracting Solid Candidates
The first order of business is to attract the right type of candidates. It’s a good idea to extend your search to encompass the widest variety of potential tenants from which to choose from. Working with your real estate agent or property management agency, you can devise an effective marketing strategy for your property. It’s best to place advertisements in a wide range of sources, both online and in traditional print media, in order to attract interest. You’ll want to be careful about setting a rental price – although it’s tempting to set the bar high in order to maximise your income, this could pare down the number of applicants you have to choose from.
To find a reasonable price range, you can speak to your real estate agent about the current market. It’s best to keep your rental price in line with similar properties in the area or other landlords will gain a competitive edge in the search for good tenants. Keeping your property updated, with modern amenities according to your target demographic, is a good way to stay on top of the competition. For example, if you have spoken to your agent and found that most potential tenants in the area will be students, it may be desirable to offer a furnished property, which would be more attractive to transitory students who may be coming from abroad to study and not have many possessions, thus widening your market to include that demographic.
The type of tenants who take care of their belongings and property will most likely look for a property that’s in top condition to begin with. Take the time to clean the property thoroughly and fix any minor repairs to ensure it’s in top shape before showing it to potential tenants. A clean, tidy, and well-maintained property will attract like-minded tenants.
Screen Tenants Thoroughly
After taking the time to advertise your property and ensure that it’s in the best possible shape for showings, you’ll have attracted a suitable volume of applicants. The next step is to screen them to find the ones who will be the best fit. A real estate agency or property management firm can take care of this step for you to ease the process. During any background check, the screener will look at factors like references, rental history, and income. It’s tempting to choose the applications that show a willingness to pay more rent or pay a large sum up front, but this could mask a less than desirable rental history. The only way to know for sure is to check references.
The first references to check are the applicant’s previous landlords. They can provide answers to questions such as:
- How long did the applicant live at the previous property?
- Did they pay the rent on time?
- What type of condition did they leave the property in? Was it clean and well-maintained?
- Did they keep pets?
- Did they allow anyone else to live on the premises without notification?
The answers to these questions can indicate what the applicant has been like as a tenant in the past. The next reference check to consider is employment-related: during this part of the screening process, the following questions can be asked:
- Is the applicant employed full-time, part-time or on a temporary basis?
- Would you describe the applicant as a good employee?
- Do you expect this employment to continue in the future?
Finding out how stable the applicant’s source of income is can indicate whether or not he or she will be able to pay rent in the future.
Some screening agents will also contact personal references, but these are usually checked last. This is because they are provided by close friends or relatives, who are unlikely to share anything negative about the applicant.
The Benefits of Using a Property Management Company
Although it’s possible to conduct these various reference and background checks on your own as a landlord, many choose to find tenants using real estate agents instead. You can find and compare thousands of Australian agents at LocalAgentFinder to find a good fit. Not only will the right agent have a strong working knowledge of the local market to help find tenants and ensure that you set a realistic price, but they can also assist with the screening process.
Property managers also have access to tenancy databases, which allows them to dig deeper when it comes to background checks. They can find a wealth of information about potential tenants, including court judgements, public records and whether or not a tenant has a history of not paying rent. Credit checks may also be a useful part of this process.
Another benefit of using a property manager or estate agent is that they can serve as a mediator between the two parties which often helps eliminate any conflicts of interest. If the landlord befriends the tenant, it may become difficult to demand rent on time or take care of other managerial duties. The property management company handles all administrative tasks to make life easier for the landlord.
After finding the right tenants, you will also need to inspect your property at regular intervals to ensure that it is being taken care of. This is another task that a property management team can take care of for you in an efficient manner. Although your tenants may be perfectly behaved; their pets or guests may not follow suit. Taking out landlord insurance can be a good idea as a form of protection for your investment.
Everyone has heard stories about nightmare tenants, and although the majority of potential tenants will be respectful and gainfully employed, it’s better not to take any chances and always screen your applicants thoroughly. By using the strategic know-how of a qualified real estate agent, you can ensure that you get the most out of your investment over the years.
Start your search for the right tenants now by finding a qualified real estate agent to assist you. Property owners have been using the free comparison service at LocalAgentFinder since 2007. This tool can help you compare and select an estate agent to help you rent your property to good tenants.