Right now, many Australians are suffering financial hardship, and a federal moratorium on evictions is in place until September due to the COVID-19 pandemic.
So having reliable tenants you communicate well with is worth even more than it normally is for landlords.
A good tenant-landlord relationship benefits both parties, so it pays to get it right from the outset.
What does the average Perth renter look like?
Research from rent.com.au revealed that in 2018 the average WA renter was female, 33.7 years old, lived with 2.4 other people, and had an income of $58,485. She also makes an average of five rental applications before finding the perfect rental to live in.
Across the country, more Australians are forgoing their dreams of homeownership, with data from the Australian Bureau of Statistics (ABS) showing that home ownership rates have fallen from 70% in 1998 to 66% in 2018. This means the potential pool of tenants is larger than it once was. People who are seeking a more permanent home but aren’t able to get on the property ladder themselves can make excellent tenants, saving you time and stress repeatedly putting your property on the market. Their past residential history and the reasons they are moving can be big clues.
WHAT MAKES A GOOD TENANT?
Good tenants stay longer
Interestingly, according to research by National Shelter, Choice and the National Association of Tenant Organisations (NATO), 83% of renters in Australia have no fixed-term lease or are on a lease of less than 12 months, with 62% feeling that they’re not in a position to ask for longer term rental security. Having a more secure, long-term rental arrangement can bring great peace of mind to both landlords and renters.
Good tenants pay the rent on time
Tenants who always pay their rent on time and never default are what all landlords want. Good references, steady credit history and checking tenant databases are the keys to finding this out in advance.
Good tenants look after your property
A reliable tenant can reduce not only your stress but also your maintenance costs if they care for your property well. They may even add to the value of the property if they are house-proud enough to make welcome additions such as looking after garden landscaping, keeping the property clean, or pointing out maintenance issues and improvements promptly.
Good tenants are easy to communicate with
Communication is essential for any relationship, and for a landlord it is critical your tenant is a good communicator in order to avoid any major issues. Checking references, particularly from past tenancies is key. So is getting a feel for how the tenant handles the application process. But it cuts both ways: as a landlord you also need to be a great communicator.
Good tenants respect legislation and the Tenancy Act
The legislation is critical as it outlines both a tenant and a landlord’s responsibilities through the tenancy. Positive signs may be requesting permission to have pets (rather than sneaking them in) or letting you know that they may wish to make property alterations, such as painting.
HOW DO YOU FIND GOOD TENANTS?
Look for a detailed application
A good tenant will be prepared and organised enough to have supplied a detailed application including references complete with contact information and proof of income.
Always check references
A good tenant has impeccable references. You or your property manager should check at least two references, ideally three or four.
Check the tenancy database
Residential Tenancy Databases (RTDs) are databases that landlords and real estate agents can access to check the rental history of prospective tenants. A database may list any breaches of previous tenancy agreements as alleged by the lessor. RTDs are also commonly known as ‘blacklists’.
Get a great property manager
Having the right property manager who knows your local market can save you a world of pain when it comes to finding the best tenant for your investment property. They will have extensive experience screening tenants and know exactly what to look out for and how to spot any potential red flags. If your property manager isn’t bringing you great tenants, it may be time to ask yourself: is it time to change your property manager?
Poor tenants can be a landlord’s worst nightmare if they fail to pay rent, cause property damage requiring costly repairs, or prove hard to evict. Avoiding them from the start is well worth the effort.
Speak to us if you need help finding the right tenants for your investment property.