All landlords face the prospect of choosing suitable tenants for their rental property at some time or another, and there are important steps involved in this process in order to reduce potential rent arrears and damage to the property.
- Run an effective marketing program. Market the property at a reasonable market rent reflecting demand in the local area and ensure the property is well presented in order to attract as many quality tenants as possible—higher demand will potentially command higher rents. If your property appeals to a wide variety of people you are more likely to receive a greater number of inquiries.
- Provide a detailed tenant application form. This should include personal contact details, forms of identification, work and rental history, start date required and permission to undertake credit and reference checks.
- Obtain a copy of photo identification (drivers license or passport is ideal) so there is no disputing identity.
- Verify accommodation, employment and character references. Phone or email all verbal or written references to ensure their authenticity. Also verify the regularity of previous rent payments—a copy of a previous rent ledger will enable you to do this.
- Complete credit checks. These can be processed by an authorised credit agency—charges will apply. You can also search for any previous Tenancy Tribunal Orders online free of charge. This will tell you if the tenant has ever owed a landlord money from an earlier tenancy.
In a competitive market a tenant may apply for more than one property at a time, so the above steps should be completed quickly so you won’t lose a quality tenant to another property.
Once this process has been followed you will be able to make an informed choice and select the tenant most suited to the property.
Choosing great tenants is a specialised skill, and using a professional property management company means you get their marketing experience along with the added advantage of drawing on their existing tenant database.