As an investor you can make all the right choices when buying a property, but if no one is paying the rent you are going to end up in trouble – fast. We explored the best ways to find and keep good tenants.
With the exception of some young-gun property investors who start their portfolios while still living with mum and dad, most of us have been tenants at some stage in our lives. But as landlords it can be easy to forget what life is like on the other side of the rental agreement. By putting in a little effort you can find and keep the right tenants, making your life as a landlord happy and prosperous.
What tenants don’t like
The best way to keep a tenant in your property and paying rent is to make sure there is nothing to complain about. According to the Department of Fair Trading, most tenants are unhappy about the same things, with the most common complaint being a need for repairs.
In NSW, the Department of Fair Trading received 862 complaints from tenants last year. Some of these were:
- Repairs and maintenance – 121 complaints
- Bond refunds – 115 complaints
- Non-lodgment of rental bonds – 104 complaints
- Dissatisfactory service by property managers – 49 complaints
- Unspecified unsatisfactory conduct – 38 complaints
How to avoid losing your tenant
Losing a tenant can end up costing you thousands, so when you find a good occupant it is important to hold on to them. Successful real estate author and landlord Margaret Lomas believes there are a number of simple ways to keep your current tenant content in your property. “What usually sends a tenant looking elsewhere is when there are repairs or desperate renovations which are left unattended, and they feel they might as well pay the same elsewhere for a property in better order,” she says.
Lomas’s top tips for keeping a tenant long term:
- Ensure your property is well maintained
- Have a good property manager who handles the relationship so you can avoid any confrontations
- ncrease rent when the market moves, but only if your property is competitive
- Attend to repairs and maintenance as quickly as possible
- From time to time, carry out a repair or renovation just before it’s needed to improve the tenant’s lifestyle
Likewise, Sydney landlord Karleitia Bodlovic, landlord of eight properties, says she uses small gestures to keep her tenants contented and paying the rent. “Gestures do not have to be grand to create harmony, and sometimes small things can make a big difference,” she says. Karleitia’s top tips for holding on to a good tenant:
- If furnishings are provided, then keep them updated every two years
- Have carpets and interiors professionally cleaned
- Fix any problems or repairs right away
- Be flexible when tenants are experiencing financial problems
What it could cost to replace your tenant
How to attract the right tenant for your property
If you are a new landlord, or the worst has happened and your tenant has moved out, there are a number of ways to attract the right occupant. By considering who your property best suits, you can create the perfect setting to attract the right tenant, in the shortest time, and save yourself the cost of having an empty property. To figure out who your property best suits, start by asking yourself these questions:
- What kind of tenant would want to live in my property?
- Is it best suited to a family?
- Is it in a family-oriented area?
- Is it in the CBD?
- Is my property best suited to an executive or professional couple?
- Is it best suited to students?
- Is it near a university?
- Would it be better suited to single-room accommodation?
What your ideal tenant wants
Once you have identified the best target audience for your property, you can increase your chance of finding the right tenant by completing small upgrades to make it irresistible.
1. Your property is best suited to a family
- Add an air conditioner or ceiling fans
- Invest a small amount of money in updating the garden and yard
- Include a washer and dryer
- Make sure the bathroom has an exhaust fan, towel racks and hooks
- Ensure the yard is fenced and safe
- Allow pets
- Have the property professionally cleaned before open house day
- Get the carpets professionally cleaned
What it will cost to make your property family friendly
2. Your property is best suited to an executive or professional couple
- Add a touch of luxury by installing modern light fixtures
- Hang luxurious curtains or blinds
- Add some stainless steel appliances in the kitchen
- Install a dishwasher
- Repaint if the walls look dull or uninviting
- Spend a little on having the property decorated for the open house
- Ensure the property smells inviting, with flowers or scented items
What it will cost to make your property attractive to an executive or professional couple
3. Your property is best suited to a student or single-room accommodation
- Offer to provide the room or property furnished
- If not, add a bed and desk
- Add microwave and sandwich press for quick meals
- Offer first week free
- Make sure your property has a high-speed internet connection
- Add a couple of extra power points in each room
What it will cost to make your property attractive to students
How to find the right tenant without paying a property manager
You know what type of tenant you want, how to make your property irresistible, and how to create a harmonious relationship. With all this information you suddenly feel confident that you can locate the right tenant and carry out your landlord role without having to pay fees to a property manager.
What you can save by finding a tenant and managing your property
In order to find the right tenant yourself, there a few steps you need to take:
- Create web listing on one of the major real estate websites, and be sure to write an engaging description of the property and include bright, high-resolution images
- Put an ad in the local and major newspapers for your area
- Put a free web ad on Gumtree
- Put up flyers in areas that your target tenant would frequent
2. Show the property
- Showing the property individually will allow you to have a better interaction with the potential tenant – but it can be time-consuming
- Create an open house day by giving all potential tenants a time and date to inspect
3.Screen your potential tenants
- Create an application form – you can download an example online
- Include previous and current employer and contacts
- Ask for current income and financial information
- Check if they have any pets
- Get contacts for referees and previous landlords
- Find out how long they intend to stay
4. You’ve found someone you like – check their references
- Ring all the referees provided
- Ask if the tenant gave the correct vacating time
- Check if there was any damage
- Ask if they ever paid late
- Find out if they caused any disruptions
5. They passed the test
- Contact them and advise of their success
- Arrange a time to collect the bond and advance rent
- Provide a new tenant’s checklist – you must do this by law and it is available from your state’s Department of Fair Trading
- Fill out the tenancy agreement form, or lease – available online from your state’s Department of Fair Trading
- Lodge the bond – you are legally required to do so and provide a receipt. For more information on how to do this, call your state’s Department of Fair Trading
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