Property Management Newsletter RLA 150557
December 2019
How To Identify The Ideal Tenant 30 Day Snapshot
16
Properties Leased
Generally speaking the perfect tenant is one who pays their rent on time, does not make constant demands and looks after the property like it is their own. Securing the right tenant can make owning and managing an investment property a dream. On the other hand, a bad tenant can turn the dream into a nightmare… property damage, unpaid rent, angry neighbours, illegal activities, overcrowding, squatting… the list goes on. Our Top Tips for vetting Tenants: • • • • •
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Ask all potential tenants to fill in a rental application form and closely scrutinise the information they supply Check all identification (we ask for 100 points of ID - passport and/or driver’s licence, utility bills, etc in the tenant’s name) Speak with previous landlords and property managers they have listed, asking… o Is any rent still owed? o Was there a history of late payments? o Did they leave any major property damage? o Were there any recorded issues with neighbours or police? o Did they get their bond back? o Would you rent to them again? Check all references thoroughly (landlord, employer and character) Confirm income (we ask to see 3 months’ of payslips or bank statements). Their income should cover the rent plus normal living expenses Review history of their rental payments if they have previously rented through a real estate agent
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Confirm employment status (check income and how long they have worked for their current employer; if they have recently changed jobs, call their past employer to establish their employment record) Search national tenancy databases to see if they have been listed previously as a ‘bad’ tenant Meet prospective tenants in person to get a ‘feel’ for who they are before they sign a lease
Watch out for these ‘red flags’: • • • •
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Tenants that have a thin employment history (i.e. a string of short-term jobs, gaps in employment and unstable income). Gaps in their rental history or the names and contact details of some landlords are missing from the application. They don’t show proof of income. The ratios are out – spread of rent-toincome should be between 25 and 38%. If the tenant would be paying more than 30% of their income in rent, they may not be able to afford it. They try to negotiate the bond or ask to pay after they’ve moved in They don’t have independent references (e.g. they only provide the names of family or friends) They offer to pay in cash and weeks in advance (this could be a warning that the intention is to use the premises for illegal purposes like drug manufacture) all. Article sourced EBM rentcover.com.au
1,038
Property Enquiries
20
Average Days on the Market (-2 days from November)
54
Open Inspections
531
Prospective Tenants Through
$405
Adverage Rent Per Week (+1% from November)