Residential tenancy laws in most municipalities and states favor the tenant and as a landlord it’s up to you to do your research and due diligence on all matters pertaining to renting out a property.
A laissez-faire attitude to managing your rental property will surely not end well.
It can be tough to evict terrible tenants, so your best bet is to learn all you need to know about landlording laws governing the landlord-tenant relationship, and the legal contract you sign, namely the tenancy agreement also known as a ‘lease’.
How You Got Here
As a landlord, you didn’t get your investment home without putting in the hard yards.
Saving for the deposit, now that takes discipline. We all know saving your hard-earned cash is a lot harder than spending it!
Plus the home didn’t one day just land in your lap did it. You had to go out and find it. Real estate investors, will always tell you – to buy an investment property, “the numbers have to add up” and now you have your very own rental you understand what that means first-hand.
The purchase price, must be at a value, that supports the funds you’ve got i.e. your deposit and what you have borrowed in a home loan. Plus the rental income needs to exceeds the outgoings (i.e. loan repayments, maintenance etc) and provide a bit of profit so it’s most likely you also had to use your negotiation skills to secure the home for the right price.
Therefore you’ve done the hard stuff, and now all that’s left is to choose the perfect tenants.
Here are some of the basic steps to take to boost your odds of finding that ideal tenant.
Check Your Property Once Again Before Renting
Make sure your property is in good condition before advertising it. This will prevent your tenants from nagging and complaining about the details after moving in.
There are simple tricks that can update the property, such as a new lick of paint. Sometimes it’s necessary to do much more. That’s because you are supposed to offer decent accommodation to your tenants, at the very least.
You should also test all the appliances in your home. Rest assured that they’re working fine. Apart from this, you need to checks electrics and gas as well.
Make the Most of Your Ad
Advertise to the max! Use as many portals as possible to your advantage when marketing your property. Different tenants are searching for a property on different portals. Make use of all property portals available to find the best ones for you.
Determine What is the Right Type of Tenant
There are many different types of tenants, some are transient, really looking for short term stays and may have their sights on purchasing their own home.
Other tenants will rent for as long as they’re alive. They will never have the means to afford a home of their own or renting is a conscious choice. It’s important to not discriminate or categorize prospective tenants in depth as it’s easy to get it wrong.
Plus you’re not really to get that involved with your tenant’s personal life – remember they’re just renting your property they are not your friends. However when working out what group you want to attract you could say these people are the most common renters:
- Young professionals
- Career couples
- Low income families
- Single parents
- Beneficiaries (Elderly, Sick etc
Verify Income, Run a Credit Check, Get References
You wanna deal with a renter who’s financially responsible, right? If your potential tenant pays his/her bills on time, chances are good that he/she will also be responsible with paying rent for your apartment.
So it is always a good idea to check the finances of a prospective tenant. You can verify income with help of pay stubs or bank statements. If needed, get in touch with a tenant’s employer to confirm his employment status, monthly earnings and attendance record.
A credit check and also help you can find out their income to debt ratio so you’ll know the likelihood of default of rent payments.
Make sure the monthly income of your tenant is at least 3 times the monthly rent. For example, if you want to charge $1,500 a month, choose someone who earns a minimum of $4,500 a month, i.e. at least $54,000 a year. Set strict requirements. No exceptions!
Finally, get references from previous landlords or property managers. The best way to gauge their future behaviour is to check how they’ve acted up to now.
Lease Drafting & Execution
Once you have found that ideal tenant, you need to seal the deal. This involves a legal lease. It must be in accordance with State guidelines.
The terms of the tenants’ living period should be explicitly stated. Please note that this process may take several days. There will be a negotiation, communication, and follow up.
Finding the perfect tenant is a daunting challenge, but you’re up to the task and these tips are sure to help you out.
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