How to select the right tenant for your property
Selecting the right tenant is crucial when managing your investment rental property.
There are some horror stories of tenants doing everything from damaging property to withholding payment of rent for months on end causing great financial loss, headaches and stress to the landlord.
The following points will help you in the process of finding that great tenant that does not make the experience an ordeal but rather a mutually beneficial relationship:
Be transparent in your advert
The advert besides sounding enticing in its description of the property should also importantly focus on the facts and details regarding all aspects of the rental so that the prospective tenant gets as much info upfront as possible, avoiding unnecessary questions and ensuring that enquiries that come through are not time wasters.
Email or telephonically ask a list of questions
Once the enquiry comes in, a list of questions should be prepared, the purpose of which is to further determine suitability of the tenant for the property and could include questions relating to the length of lease that the person is looking for, the start date of lease and the number of occupants, all of which could be potential deal breakers.
Employment Checks
Checks are important as they confirm the information that the prospective tenant has filled out in the application form. Importantly if the person applying says they work for Company X and you call to confirm and they say the person no longer works there, this should raise a red flag.
Credit Checks
Credit checks will determine whether the applicant has any defaults or has been blacklisted.
An individual with a very poor track record and mounting debt may be a risk however credit checks should not make or break the deal, one should look at the overall picture and ascertain if this was in the past, reasons for the defaults and whether going forward this would impact on ability to pay the rent.
References
Contacting current and previous landlords is an important part of the vetting process and should not be overlooked. Contact the landlords and don’t be scared to take their time to properly ask whether the applicant ever paid their rental late and if there were any issues that arose during their tenancy.
Gut Feel
Gut feel or sixth sense are one of those intangible elements that one cant really quantify but should always be taken into account.
When showing the client the property, ask questions, probe and see what sort of feeling you get with the applicant.
Often times your gut feeling will complement all the above checks and you will either feel comfortable to proceed with the applicant or decline and look for a better option.
