There are hundreds of different tenants, but how can you ensure you get the right tenant, not the nightmare tenant?
And yes, your Property Manager’s will assist you in making the choice. We know this! If you’ve got a great Property Manager, you’ll vet out the painful ones 75% of the time.
There are however, ways to avoid tenants before your first inspection. Through proper research and preparation, you’ll remove all the potential issues in selecting a tenant.
I say research a lot, and for good reason. It’s pretty damn important. Launching the Property is vital in whether the tenants you select are good candidates, or whether they are not. Be meticulous in planning, and efficient in application.
This stretches all the way back to the day you chose the property and did your numbers. Hard to change this if you’ve already bought, however you can change your expectations and readjust, or if you haven’t bought yet, lucky you.
Selecting the correct rental return on the property is imperative. The goal is to launch at the correct rate the market is seeking. If $500 per week is what similar properties are going for, don’t ask for $550 per week. Just because you think your looks better, doesn’t mean it is, often the opposite.
Ask your property manager who you’ve appointed. I’m telling you, they will be correct. They know that market more intricately than you.
Anyways, launch the property at the correct price. You’ll want a number of potential tenants attending your open home, which will mean more applications, and more chance to fine tune and select intricately the right tenant.
Know your target
Prepare the home for viewing, and be ready for the maintenance of the right demographic.
If you’ve got a one bedroom studio, tenants don’t care where the schools are, but rather the nearest bottle-shop more likely.
Know your target audience, and prepare for the maintenance behind each one and save for it accordingly. This is future planning. Looking after and efficiently attending to problems means good tenants stay longer.
If you are staging the property, make sure you use appropriate furniture to stage it for the showing. It may be fake furniture, but you’ll want to make sure you aren’t putting kids toys when 2 good mates will likely rent it out due to it’s proximity to local bars and unis. Put desks and study tools instead.
Paint the picture, let them imagine themselves living there.
Don’t be cheap
Your property manager will potentially ask you for Marketing. Don’t ignore him, because its money. That $350 investment means more for you.
Put it this way, if the agent is paying for the marketing, he has a vested interest in getting it away. Either to the first available or without the highest possible return.
Paying for it means you get the premium options, the best looking marketing. It also means no headaches for either party. It’s seriously $300-$800 (depending on the company). That’s like a week’s rent. Without it, you may miss a week sitting on the market anyway. May as well invest in your return.
Marketing will get you a properly written Web Listing, with an attractive copy (text) detailing the property. You will want it to be creative and highlight the features of the property.
Use top quality photographs. Pay for it so the Property Officer Junior isn’t taking them, it’s professional. Benefit, you can reuse them, and it looks more appealing. It highlights things that the 18 year old award wage staffer cannot highlight.
Listen to your property manager (common theme here). They will tell you where the best places to advertise are. Listen to them. Of course they’d know.
Researching your Tenants
Know your tenant. Thankfully, your Property Manager will have this covered.
Stringent reference checks are an absolute must. Seriously. You will want your Property Manager to be so good, they interviewing the tenant, and they are actively looking to make sure they are the right fit.
Personal references, professional references, past employers. Effectively you want to build a profile of the guy who’s going to live inside your most expensive purchase.
Another important tool is the TRA check, or similar. This will check whether the tenant is blacklisted from renting, any issues with tribunals, court, missed payments, rental bond issues etc.
You want to know every little piece of information about your tenant, from your property manager, so you can make a decision together.
Then, you can sleep soundly that you’ve made an excellent choice.
One final tip – get Tenant Insurance. No matter how many checks, you can’t screen for inevitable clumsiness or stupidity. But we will talk about insurance later!
Image Credit: Casey Dunn Photography (Flickr)