Choosing the perfect tenant
What even is the ‘perfect’ tenant? Maybe a mix of Mary Poppins, Mrs Doubtfire and the cast of Downton Abbey. But without those guys filling out a rental application form for your property, it takes a bit of know-how to find the best fit.
Do it yourself vs. through a property manager
Do you have the time and resources to market your property (hosting it online, advertising, photography)? Can you manage the inspections of properties and the entire screening process of tenants? Do you want to manage the property and the tenant’s needs (repairs, contracts, finances) on your own? Are you happy to provide all the required legal documents?
If these questions are making you sweat, then stress less. You can still manage aspects of your leasing while employing a real estate agent or property manager to handle other aspects. While you can teethe out these details in your contract, you can also leave the majority of these tasks to a property manager.
Check out our post on leasing your property by yourself or through a property manager. If you are at a stage in your life where you can and want to manage the listing yourself then this can be rewarding and often cheaper.
However, most people opt for using a real estate agent or property manager. They can oversee the entire process of leasing a property and often have access to data about possible tenants that you may not, saving you a big headache. They are lastly a middleman between you and your tenant. Through this degree of separation, you are free to make choices about your investment with a clear head.
Prepare your property
What type of tenant will your listing attract? Does it have a backyard, is it in the ‘burbs and has some great schools nearby? Or is it a one-bedroom unit within the inner-city area or a studio apartment in the centre of town?
Knowing who you want to attract (families, singles, couples etc.) is the first step to creating a leasing strategy. It helps you or your agent market your listing with words that will attract your target audience as well as help in the screening process.
Following this, make sure you prepare your property for sale. No, you aren’t selling it, but treating your leasing this way (making repairs, cleaning the property, installing modern amenities) will attract the right type of tenants.
If you are working with a property manager, talk to them about the sort of tenant you may be after. This helps them in the initial screening and saves you time. Your property manager should be able to tell you why they have screened applications in the way they have and provide you with a small list of applications that meet your criteria. Alarm bells should ring if all you get are three applications and one of them only has one reference on it. Your property manager should be diligent during every process they are involved in.
Applicants always put their best feet forward during these early stages and reference checks are the best way to find out the truth about a tenant. There are three types of references you should ask for: past property managers/landlords, employers and personal.
Ask previous property managers these questions:
- Did the applicant pay their rent on time?
- Did they get their bond back?
- What was the duration of the lease?
- Did they have pets?
- An overall view of the applicant.
Ask previous and current employers these questions:
- What role did/does the applicant have? This can be a friendly way to find out whether the applicant has moved forward in their career.
- The duration of their employment.
- Whether the employer expects them to stay long in their role.
- Again, overall feelings.
Personal references are the least reliable because friends and relatives of an applicant will almost always talk in favour of the applicant. Always look for more references from the previous two sources than personal references.
A common piece of advice when choosing a person for a job or for a lease or anything similar is that you go with your gut feeling. This is always true but you cannot go with your gut feeling if you don’t know the facts. Developing a strong strategy as a landlord and being involved in the screening process will give you the tools to make this gut feeling.
Following this entire process, follow through by providing your tenants with a level of service that you would expect so that when you make regular inspections of your property there won’t be any nasty surprises.