There’s no two ways about it, tenant selection is the single most important factor when it comes to the success of your property portfolio.
You need only pick up the newspaper to find a horror story about tenants trashing a property and causing countless thousand dollars’ worth of damage.
Of course, not all tenants are like this and there are plenty of outstanding tenants that will cause you absolutely no issues whatsoever, but as with anything in property investment, minimising the risk is essential. When it comes to tenanting a property, there are some very simple things that you can do to ensure that you’re minimising your risk and doing everything you can to secure yourself a painless experience.
Usually something you would do in a job interview, getting references is an essential part of any application that a prospective tenants puts in front of you. Simply put, you shouldn’t be accepting anyone unless they have provided you with three references. Of course, there are different quality of references. Friends, family and partners will give you glowing references of the prospective tenants, whereas previous landlords, current employers and former property managers will give a more honest reflection. You should, as best practice, seek out at least two references from previous landlords and always ask your prospective tenant to provide a minimum of three references in total.
Rent arrears are frustrating. To be frank, rent arrears don’t cover your mortgage repayments and they definitely don’t cover your bills. It is important to understand if your tenant is in a position to cover the amount of rent that you have listed your property at. You don’t need to ask the tenant for proof of income or payslips, but you should be asking the tenant what the rent was on their previous property and double checking with their references. Running a credit check with your property manager could also be a non-invasive way to ensure that your prospective tenant is not going to cause issues by not paying their rent.
3) Renting history
Possibly one of the most important things you should be checking when a tenant applies for your property is their renting history. Have they been to tribunal? If they have, have they disclosed it? What did they go to tribunal for? Did they win their case? Who applied to the tribunal? Was it the tenant or the owner? These are all questions that are incredibly important to answer. Even good tenants can be in tribunal if they take their poor landlord to court themselves! Knowing about your tenants rental history will allow you no surprises when they move into your property and will allow you to find the best possible tenant for you!
4) Communication 🏢
Communication is the key to success in any relationship. You can’t enter into a contract with someone that you can’t communicate with. Think carefully about what the communication has been like with your prospective tenant trying to organise the viewing and whether or not they have been reliable, i.e. showed up on time and submitted their application as they said they would. All of this should be considered in selecting your tenant.
5) Trust your gut
At the end of the day, no matter how you look at it, renting property is a people game. At Tommy’s we have always run by the motto, “people, not property.” Sometimes, you can do all the checks in the world and something does not feel quite right. Sometimes, you just have to trust your gut. You will have an impression of someone from when you first meet them.
Directorand often that is the right impression. We’re not saying judge a book by it’s cover, but at the viewing you should be taking time to get to know each prospective tenant just a little. Your gut feeling should not be ignored as it often gives you a great insight into what your relationship will be like with the tenant moving forward!
While it may not seem that difficult, tenant selection is one of the most important things that you can do when it comes to the success of your property portfolio and shouldn’t be taken lightly.
For obligation free advice, we are more than happy to take calls anytime on 04 212 6395. We look forward to working with you through 2019.