Finding the right tenant for your rental property can feel like searching for a needle in a haystack. With close to 40 per cent of households in New Zealand renting, a growing number of international visitors and students as well as rising property prices extending rental tenure, it’s no wonder that the volume of renter inquiries can be overwhelming.
But there is a solution - a few best ways to find tenants for your rental property. To help you make the right decision, we’re revealing our property managers’ top three secrets to finding the right tenant. Arm yourself with this knowledge, trim down your selection criteria and you’ll quickly discover that the ideal renter isn’t quite so tough to find.
1. Ask them to fill out a pre-tenancy application—and check it!
Design a pre-tenancy application document that asks for basic details: names, contact details, previous rental histories and, perhaps most importantly, references from previous property managers or landlords and credit history.
Always be sure to check how true these details are as well—if you don’t talk to their references, why even bother asking for them in the first place? This will immediately cut down your potential tenant list.
Just make sure you secure or destroy the personal information afterwards; not doing this could result in a breach of your tenants' privacy.
2. Aim for a good fit - for both parties
Cosnider the fit of the property to the tenant, not just the tenant to the property. The interview is a crucial part of this process, so aim to ask as many questions about their interest in the home—not just about their finances and whether they have pets and so on.
This lets you get a feel for whether your property will meet the needs of your tenants, as well as vice versa. For example, somebody may be concerned about the lack of local transport—but you know a new bus station is planned for just down the road.
By checking their specific interests and concerns during the interview, you could seal the deal on a perfect tenant that otherwise might have passed over your home unnecessarily.
3. Always factor in the finances
How is being a landlord like being a banker? Both of them deal with risk every day, and the key to success for both is reducing that risk. You, as a landlord, can do that the same way a banker can: by factoring in your potential tenant’s finances and credit history.
Let’s say you’ve found a tenant or a family that is perfect for your home. They are courteous, respectful, have great references and generally tick all your boxes. However, your credit history check reveals they also have defaulted on a number of credit cards and loans in the past.
During the interview, you ask them about this, and they tell you they have recently dropped from a dual income to a single breadwinner—and their new, lower income would only just cover the rental expenses.
Ultimately, your investment is a business, and it does nobody any favours to accept a tenancy from someone who may end up in arrears and/or having to leave a few months later. Check income, check outstanding debts, and ensure that your otherwise-ideal tenant is solid for the foreseeable future.
Stop worrying about getting the wrong tenants. Arm yourself with the knowledge you need with our free ebook below.