A brief guide to picking tenants

Need-tenants-Here-is-a-brief-guide-to-help-you-select-the-right-ones_157_6009416_0_14101098_300Australia is fast becoming a nation of renters. With property prices rising, a lot of households are either choosing to remain on the renter treadmill, or finding it is the most appropriate choice in the current climate. In fact, the proportion of households who live in rental accommodation has grown considerably. The Australian Bureau of Statistics 2012 Year Book found that the number of homes across the country that were mortgaged or owned outright dropped from 71.4 per cent in 1966 down to 69.8 per cent in 2006 – that is over 2 million persons who were living in rented accommodation.

With the pool of tenants ever-widening, landlords have a tough choice to make. Selecting the right lessee for your property might seem like a difficult task, but there are a few things to keep in mind when making a decision. Here is a brief guide to help you through the process.

Figure out your audience

Before you start advertising and searching, it’s important to have a solid idea of your ideal tenant and what they will find attractive in a property. This might relate to the area the home is located in or even the type of property itself. Think about the features are offered in the surrounding area. Schools, parks and public libraries typically appeal to families, while restaurants, galleries and cafes often find favour with the younger, more mobile renter.

Consider how you can improve your property to attract and retain tenants. A sprawling suburban home with a sizeable backyard will appeal to a far different range of prospective renters than a compact apartment, and could even influence how long they are willing to stay there.

While there are many tenants who are happy to move around more regularly, there are also households that prefer to treat their rental as a home. A report from the Australian Housing and Urban Research Institute found that over a third of all private renters in 2013 were long term residents, meaning they lived in the home for a decade or more. Finding and retaining these tenants can give you some peace of mind in terms of stable rent and protect your investment.

Before you start narrowing down your choices, have a think about the market in your particular suburb. High demand for rental properties can give landlords the upper hand when it comes to selecting the right one, but if it is waning you may need to be a bit more flexible. Try to appeal to a broad range of people before you start to chip away at the applications.

Screen thoroughly

After advertising and inspections, you will have a group of applicants to choose from. Now comes the fun part – sorting the good from the bad. Don’t be tempted to skimp on this part of the process, as rushing through could set you up for disaster. Screening your prospective tenants thoroughly takes a fair amount of time and effort, which you might be running short on if you are juggling a number of investments. You can tap into the skills and services of a property management company to help you at this point.

They can conduct interviews, do background checks and speak to references on your behalf. A property manager also has a great deal of experience, so they know what characteristics to look for in a good tenant.

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