Posted on: 7 June 2016Share
If you've recently bought an investment property and you've never been a landlord before, you may be wondering how to find quality tenants. How do you tell which tenants are the most likely to pay the rent? Is it legal to do criminal background searches on tenants? Which questions can you ask and which questions will get you into trouble? If you have questions like this swimming around your brain, you may want some direction on how to screen tenants effectively and legally.
Here are five tips to help you find quality tenants.
1. Insist upon a detailed application.
Don't just offer your property to anyone. Instead, have all prospective tenants fill out a detailed application. Ask as many questions as possible on the application about their employment, past landlords, and whether or not they have pets. Also, request to know if they smoke as smoke can make your property smell and increase the risk of fires. But, avoid asking questions that you are not legally allowed to ask such as whether or not they have children.
Keep in mind that you can consider the renter's income while determining if you want to offer them the chance to rent your property. However, you cannot discriminate because of the type of work they do. For example, if you don't personally agree with an industry, you cannot discriminate against a tenant for working in that industry, but you can decide against them if their income is too low to afford the rent.
2. Do a background check.
If possible, run the tenant's information through a background check. Unfortunately, criminal records are considered confidential in Australia, and you cannot access them. However, there are now large databases where landlords can report information about tenants, and these can be useful places to find out some background details on prospective tenants' relationships with past landlords.
3. Check out online social media profiles.
In addition to doing formal background checks, consider doing a casual background check by looking at the applicant's social media accounts. While this may not work for every tenant as some people do not have social media accounts and others set their accounts to private, it can give you a quick snapshot of the tenant's lifestyle before you rent to them. For example, if all of the recent pictures involve partying or things you want to avoid in your investment property, you may want to look at another tenant.
4. Talk about their long term plans.
In addition to thinking about their past, talk with the prospective tenant about their future. As a landlord, it can be expensive to deal with turnover in your rental property, and the longer the tenant plans to stay in the area, the better. For example, you may prefer to rent to someone who has recently started a job and plans to stay at the same company, than someone who is a student and planning to move back home at the end of uni.
5. Work with a property management company.
Screening tenants on your own can be hard, and if you don't screen them adequately, you may end up renting out your property to someone who is irresponsible, potentially leading to damage, missed rent payments or other issues. Sidestep these threats by working with a property management company. They know how to find and screen quality tenants.