Property Investment Tips: How to pick a good tenant from the bad

By the resi financial blog team, 30 March 2015

Property Investment Tips: How to pick a good tenant from the bad

Owning a rental property can be an incredibly rewarding experience, but it can be easy to overlook one part of the investment equation - tenants. Filling vacancies and retaining tenants is a crucial aspect of renting out a home, but selecting the right tenant for your property is equally as important. Here are few tips for choosing a reliable renter. 

Know your target market

Before anything else, you need to figure out who to pitch your rental property to. Depending on the property itself and the location, the types of people your listing attracts will be very different. Half the battle of finding suitable tenants is attracting them in the first place - highlight elements of your property that will appeal to a certain segment. For example, a lovely five-bedroom house in the suburbs will have a different target audience than a modern studio in the central city.

Keep in mind that a broad approach will often help you find tenants more quickly, but grasping who they are can help you sort suitable prospects from the rest. 

Screen thoroughly

The other piece of the puzzle is the screening process. It's easy to become complacent with this step, especially if your property is in hot demand. But making sure the applicants have a solid rental past can often help you avoid future problems.

Go through each of their references methodically. This can include past landlords, property managers and their employer. The cornerstone of this process is determining reliability. You want someone who will pay rent on time consistently and, hopefully, remain in the property for an extended period of time. Check how long the applicant spent in their last property - someone who stuck to a 12-month lease agreement without issue will likely be a good option. 

However, the future is often unpredictable. It's worth investigating landlord insurance in any case, as it can protect you against those unexpected events, like damage or a flighty tenant. 

If you want to dip your toes into the investment pool, get in touch with a resi loan specialist for a great selection of investment loan possibilities

Categories: Property Investment