Finding a good tenant isn’t easy which is why it can be valuable to hire a good property manager. Focus on a prescribed set of qualities that make a good tenant rather than relying on intuition. And remember that the Fair Housing Act is designed to ensure any selection criteria is applied equally to all applicants.
If you use a property manager, they should have potential applicants on their books who are searching for a property similar to yours and whose references have been thoroughly checked.
However even if you do have a property manager, it helps to understand the fundamental principles of tenant selection. Here’s a guide:
- Shortlist. Ask your property manager to identify candidates who’ve rented through the agency and are trusted to fulfil the lease terms.
- Credit check. A good credit score shows the debt and credit held by a candidate, whether they pay bills on time and if any judgments have been made for uncollected rent or property damage. The Tenant Verification Service (TenaCheck) and Equifax are online services that can assist that your property manager is likely to use.
- References. It’s almost impossible to guarantee you’re dealing with an honest applicant. Your property manager will check with their employer to validate their earnings claim and contact the previous landlord. This might seem invasive, but it’s routine.
- Affordability. Focus on candidates whose gross salary totals 30% or less of the rent. Banks use a similar benchmark for issuing mortgages.
- Trust. An unsuitable candidate usually demonstrates a bad attitude at the initial inspection. Finding fault and trying to negotiate down the rent are common tactics. In the longer term, a petty request or dispute might involve their withholding rent so ask yourself if you feel you can trust the tenant.
- Responsible tenant. Great tenants commit to putting out the bins, keeping the garden in good order and even undertaking the occasional job to keep the property in good repair. And they’ll alert you to any issue before it becomes a major problem.
- Neighbours. A tenant who plays music loudly, endlessly revs cars or litters will create conflict. Eventually, these arguments arrive at your door. So, consider your neighbours – and your peace of mind – when selecting a tenant.
- Inspections. You need to know if your property is being treated properly, so make a quarterly or six-monthly inspection part of the lease terms and make sure you read the inspection report.
- Care, but not too much. Everyone has drama in their life, but it’s no reason to miss the rent. Choose a tenant who’ll not try to draw you into their troubles and make their rental payment one of them.
This article is provided for general information only and does not take into account the specific needs, objectives or circumstances of the reader. Before acting on any information, you should consider whether it is appropriate for your personal circumstances, carry out your own research and seek professional advice.