So you have an investment property and you want to lease it. Great! All you need now are tenants. But not just any tenants- you want tenants who give you minimum fuss and to get people like this time after time…
Surely this is the desire of every landlord, isn’t it? Yet for our best intentions, how many times have we heard about the tenants who turned out to be a living nightmare? Shows like Today Tonight and A Current Affair have well and truly paid for their slots by the sheer number of ‘Tenants From Hell’ stories they run- the imagery of trashed houses and blurred out faces yelling bleeped insults to the camera crew flash straight to mind.
How do you avoid this worst-case scenario?
Managing agents carry out the following, 4 screening tactics when finding the right tenants to fill a vacancy for a vendors’ rental. This is how to ensure you get the right people moving in, 9 times out of 10:
#1. Check The Database
Tenancy databases are provided by private companies, which contain valuable information on prospective tenants. Databases like this operating in NSW include the National Tenancy Database ,Trading Reference Australia and TICA. Guidelines have been set to ensure the information supplied on these databases is legitimate. This information is only available to fee-paying members like property managers and real estate agents. If you’re an owner, you may not have the ability to gain access to these databases, which is where a property management professional comes in handy.
#2. Call The References
Failing to follow up on supplied references puts you at risk of choosing the wrong tenant. For this reason, it pays to take the time to do a bit of background checking. Managing agents who are thorough are those who bother to ask for specific references AND follow up on them. A reference check, when done properly, typically includes previous landlords or agents, past or present employers, past or present colleagues and a personal character reference contact. If a prospective tenant fails to provide references, that should be cause for caution. By calling these references, the agent can verify that the information supplied is accurate.
#3. Verify Their Income
The last thing you want to deal with (as a landlord) is a tenant who defaults on payments. Some prospective tenants lie on their application about their income and job status. An agent who takes the thorough approach checks their bank statements, employer letters, credit checks etc. to establish whether the tenant can afford the rent. You also want to ensure that the prospective tenant is earning from a legal source- the last thing you want is a call from the Police because the tenant paid their way through selling drugs or stolen goods! Getting verification on the debt to income ratio is also a good strategy, as it indicates how much the prospective tenant can afford to pay after their monthly liabilities are taken care of.
#4. Check The Applications Carefully
Some prospective tenants lie on their applications. So you can’t assume that their application is a sound one just because it looks good on paper. A good agent verifies the information supplied through a series of checks. This would include bank statement verification, employer details, tenancy history, rental ledgers etc. Prospective tenants who are the real deal have no problem sharing this kind of information with property managers, who then verify its’ authenticity.
In A Nutshell:
To manage your rental property with peace of mind, it comes down to doing the proper screening work first and foremost. As we’ve shown before, here at Shields Gillman we’re dedicated to going the extra step for our vendors when managing their property:
When it comes to screening your property to match with the right tenants, we take this same approach. So if you want to put your rental property in reliable hands, give us a call today: