Renting out your property?finding good tenant 3

The tenant you choose is as important as your investment property.

Why?

A good tenant provides an ongoing, long-term income stream. The longer they stay in the property, the longer you go without losing money and the need to spend time replacing them.

But for most, the search to find the “right” tenant is an exhausting process. The reality – it’s hard to find someone that will look after your property as if it were their own.

I get it. That’s why in this post, I’m going to show you the 5 warning signs of dud tenants, and how to go about finding a good tenant for your property.

 

5 Warning Signs of Dud Tenants

finding good tenant 21. They have a low income-rent ratio

As a general rule of thumb, no more than 30% of a tenant’s weekly income should be going towards rent. If the applicant’s ratio is more than 30%, you know they are likely to struggle to pay the rent.

It doesn’t matter how keen they are on the property – save yourself the worry and only consider applicants that can make the rent.

2. There are gaps in employment history

Be very cautious if your applicant’s employment history seems disjointed. Any less than three months in each job, or large gaps between them, I would be looking at another candidate.

Your tenant should have a stable income, so they can continue to pay the rent throughout the lease period.

3. Their references are from family and friends

If your applicant only has family or friends listed as references on their application, ask them to provide independent references.  Phone numbers that belong to a business are always good.

It’s also a good idea to check the named business on the internet. Call their main number and ask for the referee by job title.

4. They can’t prove their income

A pay slip is one of the easiest ways to determine if a tenant can afford rent. A proper slip will prove to you that the applicant actually earns the yearly income they claimed on their application.

Make sure the applicant provides three or more payslips – their current one and the two previous ones – to show income continuity. This is the standard procedure when applying for a bank loan – it is equally appropriate with tenancy applications.

5. They ask to pay the bond after they move in

Stand your ground on this one. If someone can’t afford to pay their bond, they probably can’t afford to pay the rent. Whatever their reason, say no. The most important thing is your investment and the bond provides that extra security in case the tenant damages the property.

 

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