12 essential steps for vetting tenants

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Most investors are all too familiar with the horror stories of what can go wrong when you have the misfortune to land a problem tenant.

But the best way to avoid such nightmares – and thus maximise the returns on your investment - is to try and select a good tenant in the first place.

Whether or not you decide to leave the tenant selection process in the hands of a property manager, it is sensible to have a solid set of vetting criteria in place.

When it comes to vetting potential tenants, landlords should:
  1. Require them to fill out a detailed application form.
  2. Get both professional and personal references and thoroughly verify them.
  3. Request at least three months bank statements.
  4. Use a credit referencing service.
  5. Get extra information – eg: a utility bill in the tenant's name.
  6. Ask them to show evidence of assets.
  7. Speak to their current real estate agency and, if possible, some previous landlords to establish their rental history.
  8. Call their current employer and, if possible, a past employer to establish their employment record.
  9. Ask for a copy of their passport and/or driver’s license.
  10. Secure a guarantor - eg: a parent.
  11. Check tenancy databases to see if they have been listed as a bad tenant.
  12. Always meet them in person to assess them and get a feel of who they are.
Essentially, you should be looking for a tenant who is in stable employment and has a regular income; has a solid rental history; and who is reliable, diligent, responsible and houseproud.

Finally, it is also a good idea not to rush into a decision too quickly… An extra week or two of rent might pale in significance compared to a bad tenant decision made in a hurry.

*The suggested vetting criteria are based on the advice of Eezirent’s Diane Bukowski, Rent My Estate’s Michael Gilbert and Property Boss’s Tamara Schiess.

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