Tenants are an important part of your investment property succeeding, so here are some tips on getting the best tenants and minimising tenant turnover.
Find the right property manager
Finding the right team to manage your property is critical. Too many people do property management because they think they should rather than they want to do it. They must:
• Have a dedicated property management division.
• Have experience and have had previous success with problematic tenants.
• Have an agency principal involved in the function of the property management division.
• Have a manager that does/oversees inspections.
• Has good programs and processes for vetting applications and monitoring rental arrears.
Update your property
By keeping your property in top condition, you’ll attract tenants who take care of their belongings and property, and it will also keep you ahead of the competition. Ensure property updates suit your target demographic.
Set the right price
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. Your real estate agent should advise you about the current market and how much similar properties in the area are being rented out for before deciding on a realistic price.
Always run a credit check
It’s a good idea to include a credit check in the screening process as it is usually safer to choose a tenant who has good established credit.
Ensure reference checks are being performed
Ensure your property manager makes reference checks with the applicant’s previous landlords, who can clarify whether the tenant paid their rent on time, allowed pets or anyone else to live on the premises without notification, and the condition they left the property in. A good screening question to ask is whether the landlord would rent to the applicant again.
In addition, reference checks with the applicant’s current employer can verify the stability of the applicant’s source of income.
Ensure the applicant has been vetted against a tenant database
Many professional property management agencies have access to a tenant database. These are run by private companies and show whether a tenant has had any legal actions filed against them and whether there are any other red flags that have been officially reported.
Photo-document the property’s condition
Take detailed photographs of your property before anyone moves in. Copies should be provided for the tenant, your property manager and yourself. These photos can be used as a deterrent against any false claims regarding damage later on.
Ensure the property is inspected regularly
Once your tenant has moved in, your property manager will need to inspect the property regularly. Although your tenants may be perfectly behaved, their pets or guests may not follow suit.
Consider landlord insurance
Landlord insurance is designed to protect your property against loss, theft and damage and should be a must. There are also policies that specifically cover the cost of unpaid rent or the legal costs of chasing up this lost income. Because these policies differ, it’s best to compare your options carefully to find the right fit.