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You’ve gone to the trouble and expense of buying a rental property; now you need a dream run of good tenants to seal the deal on your investment success. But out of all the rental applications you receive, how do you know which tenant is likely to pay their rent on time, keep a tidy home and stay for as long as you want them there? After all, reducing tenant turnover can mean the difference between a steady stream of rental income, or time and money lost advertising for replacements.
The good news is that when it comes to finding and keeping good tenants, there are strategies you can use. It’s true you don’t have any sway over external factors that might cause a tenant to leave, like a change in their life circumstances, but there are other factors within your control.
The first strategy starts way back when you’re choosing an investment property – by buying something that appeals to renters. The second strategy is to choose your tenants wisely, and the third is to be a great landlord. Here are some practical tips for achieving all three.
Provide the amenities that renters look for
You can’t hope to please everyone, but making your property attractive to your target demographic will help you stay ahead of the competition. Amenities that might be popular with renters include airconditioning, soundproof walls, built-in storage, a modern kitchen and bathroom, as well as outdoor spaces like a balcony or deck. The ability to park easily, whether off-street or undercover is another likely plus.
Also, think about the creature comforts that will make your property a pleasant place to live. A washing machine, dishwasher, flyscreens, fans, security doors and picture hooks make a home more liveable.
Respond to requests promptly
A tardy response to requests for repairs is a common cause of tenant frustration. Aim to return their emails or calls on the same day you receive them, even if it’s to acknowledge the message. Remember that most repairs are tax deductible, so there’s no reason to drag your heels on getting them done.
Better still, keep up the maintenance of the property so that it doesn’t deteriorate over time. Cleaning gutters, pruning trees, getting rid of mould, checking smoke alarms and replacing specialised light bulbs are just a few of the jobs that landlords may be responsible for.
If you do decide to drop in and inspect or maintain your property, respect this is someone else’s home even though it belongs to you. State regulations dictate how regularly landlords are allowed to visit for inspections and how much notice you need to give your tenant.
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Be fair with your rent
Keep your rental price in line with similar properties in the area. A fair and gradual rental increase is a better choice than opting for a sudden large increase that may scare your tenant away.
Screen applicants thoroughly
Whether you’re handling the rental applications yourself or using a property manager, it’s essential to ensure a thorough screening process. At an absolute minimum, check references, rental history and income. If self-employed, ask for their accountant to confirm business ownership and cash flow for the past two financial years.
Do you have landlord’s insurance?
If you’ve made a bad choice of tenant, at least landlord insurance has your back. It covers you for loss of rental income, damage and legal expenses required to evict a tenant.
Ask for a reference from the applicant’s previous landlord and current employer. Of the landlord, ask questions like how long they stayed in the property, whether they gave the notice to vacate and what was the state of it when they left. Of the employer, ask whether they are employed full or part-time, are they punctual and responsible and how long have they been in the same employment.
Verify the tenant is who they say they are by checking their identification is true and accurate. Credit reporting bureaus like Equifax offer tenancy reports, which can background check identify and whether there is money owing, termination notices or bankruptcy proceedings against their name.
Show your appreciation
A hand-written thank you card, gift voucher or bottle of wine once a year is a great way to demonstrate your appreciation to a good tenant.
A few months before lease renewal, you may even want to offer an incentive to stay, such as a property upgrade or the first month’s rent for free.