“Tenant selection is the most important part of the whole process. If you get that right, everything else will flow on nicely. If you get it wrong, that’s when bad things happen.”
Everyone’s familiar with the stereotyped views of landlords and tenants. Landlords are lazy, money-hungry liars; tenants are shifty rent-dodgers who kick holes in walls. In reality, as our clients will tell you, most of the time both parties are sensible, reasonable people who want a stress-free relationship. Landlords want a stable return on their investment and tenants want a pleasant place to live. The trick to finding that balance is to get things right from the start. In my experience, tenant selection is the most important part of the whole process. If you get that right, everything else will flow on nicely. If you get it wrong, that’s when bad things happen.
KNOW WHO YOU WANT
There is a definite correlation between a decent property and a decent tenant. Think about the sort of tenants you want before you buy any investment property. If you want single professionals, buy an apartment or townhouse in a CBD. If you want to attract young families, buy in popular school zones or near good public amenities. Don’t buy a renowned ‘party house’ in a rough area and expect prospective tenants to be quiet family types! Ultimately, you should want to appeal to the largest proportion of renters out there, so you can maximise your choice of tenant and maximise the rent.
MARKET THE PROPERTY WELL
Good tenants are often busy working people who don’t have a lot of spare time. Make your advertising clear and detailed, emphasising the property’s good points. Include as many photos as possible, but don’t use wide-angle images - the worst thing you can have is a tenant saying ‘it doesn’t look like it did in the photos’.
Remember that tenants are often only looking for a property that will suit them for a 12-month period. They want to know that a place that will fit their furniture and be convenient for their current lifestyle. It’s a different mindset to owning a home.
DO YOUR HOMEWORK
We like to have a really good conversation with a potential tenant before we show them a property. If that goes well, we ask them to fill out an application form and we talk to at least three referees (ideally previous landlords, employers, churches or sports clubs). References from previous landlords or management companies are worth their weight in gold when you’re assessing whether or not a tenant is a good fit. We also check their credit history, whether they’ve been involved in any Tenancy Tribunal hearings and have a look at their online profile. What we want to do is form a holistic picture of what they’re like. Trusting your gut is important too.
We find that tenants that are attracted to property management companies are a superior calibre because they want the professionalism of dealing with us. People who don’t want to go through property management companies often don’t want to be scrutinised.
KEEP IT PROFESSIONAL
Choosing a tenant who’s a good fit for your property means you’re establishing a positive relationship for the future. You’re much more likely to end up in a win-win situation if both parties understand and meet their obligations from the beginning. Keeping professional communication going is also crucial. A lot of DIY landlords find that difficult - either neglecting their obligations or blurring the lines and getting too close to their tenants. That’s where we can really add value to the relationship. I view the property manager’s role as being like a set of scales, with the tenant on one side and the landlord on the other. We’re in the middle, holding everything together. If one of those is out of kilter, then the whole thing is out of whack. We monitor the relationship constantly so it stays in balance.
Tessa Keeling has owned and operated Quinovic Property Management (Riccarton) since 2006. Previously, she worked for NZ Police for 12 years.
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