A good landlord will go to great lengths to find a qualified tenant for their rental property. Qualified tenants are those that have a proven track record of financial responsibility and rule-abiding behaviour, indicating their ability to pay rent and not damage the property.
But a great landlord will hope for more than just a good credit score and clean criminal background in their tenants. Although difficult to screen for, there are certain qualities that can make a renter stand out as the perfect tenant in their landlord’s eyes.
A reliable tenant will often reduce a landlord’s maintenance costs, minimise wear and tear, as well as look after the garden and property as if it were their own. They are worth their weight in gold and can add to the value of a property.
However, bad tenants can be everyone’s nightmare- they might pay their rent late, cause havoc with the neighbours, treat an owner’s property like a tip or unreasonably demand endless costly repairs. A bad tenant can cause problems for up to 12 months before you can get them out of the property, so it’s important to avoid them. Looking for home builders? Look no further! MJS Construction Group has you covered.
After investing in a rental property, you want to be sure that those renting will cherish your investment. By creating a list of qualities to look for in a tenant, you can avoid costly evictions, non-payments, and potential damage to your property. So we’ve created a list for you, these are eight things you should inquire about when fishing for a good tenant.
So, What Makes A Good Tenant?
A good tenant is able to pay.
This is a no-brainer. If a tenant isn’t able to afford the rent, you shouldn’t be surprised when he doesn’t pay the rent. A good rule of thumb is that the rent should not exceed 30 per cent of the applicant’s income. You may want to make that one of the written criteria for qualifying to rent the property.
But, just because the rent rate is less than a certain percentage of the applicant’s total income, it doesn’t guarantee that he will be able to pay. He may be overextended in other ways or live beyond his means. Again, a credit check is a good indicator of how the applicant manages money. Theoretically, the better he manages his finances, the better his credit score will be.
A good tenant is creditworthy.
Saying a tenant is creditworthy is another way to say he has a good credit score. The tenant’s credit score reflects whether he pays his bills on time, how much debt he has, and what type of debt he has. A detailed report may also indicate whether he has had judgments against him for uncollected rent or damages.
Running credit and background checks is an essential part of the application process along with verifying the applicant’s employment, verifying his rental history, and calling on his references. If you manage your property, you can use online services such as Tenant Verification Service or TenaCheck, to check an applicant’s credit score. (A property manager will obtain the tenant’s credit score and verify his application if you use one to manage your properties.)
A good tenant is honest.
There are so many ways a dishonest tenant can trip you up. He can lie about mailing the rent, having his hours cut, or not knowing why his check bounced, but he can also lie about what happened to the dishwasher or the information on his application.
During the application process, the only reliable way to catch a dishonest tenant is to verify the information on his application. Start by requesting a copy of his drivers’ license (most tenant screening services require one along with a completed application before running a credit check). Do his name and information match what is on the application?
Next, call his employer. You’d be surprised at how many applicants don’t earn as much money as they say they do on the application. Follow that phone call with one to his current landlord, even if it’s his aunt. Has he lived there for one year or just since he was evicted from the last rental? Finally, call any references, if listed, to get their impression of him.
A good tenant is clean.
You want someone who will take good care of your property, not someone who is going to leave food remnants to build up in the microwave or let trash pile up on the patio. Potentially, the bigger the mess the tenant makes while he is in your property, the bigger the mess you will have to deal with when he moves out. Also, filth can attract bugs and other pests and lead to an infestation.
Suppose you have to be careful judging the applicant on his appearance, the appearance of his car, or the appearance of his current residence if you have the opportunity to meet him there. Refusing to rent to him solely on appearances can be a violation of the Fair Housing Act. Instead, cite a measurable indicator, such as his credit score, or the fact that he lied on his rental application.
However, if he meets all of your criteria, let him know what your expectations are for maintaining your property and include a “cleaning” clause in the lease. The “cleaning” clause will give you the opportunity to evict based on a violation of the lease if the property isn’t kept clean.
A good tenant is drama-free.
Some tenants thrive on drama. These are the tenants that call with excuse after excuse about why the rent is late: they lost their job, their wife left, their dog died. Their life is one problem after another, and you’re invited to the party.
It’s not as difficult to spot these tenants as you would think. They will tell you about their hard knock life (in fact, good luck getting them to shut up about it). Fortunately, these tenants often have histories of late payments and evictions, so you shouldn’t have any trouble finding a reason to not rent to them.
A good tenant doesn’t make excuses and doesn’t bother you unnecessarily with the details of his life. At MJS Construction Group, we offer a wide range of home builders Melbourne.
In order to pay rent on time, a good tenant must have a steady income. You can verify income by asking for copies of their pay stubs. Ideally, a tenant’s monthly income is roughly three times the monthly rent. However, even if their income is three times the rent, you have to factor in any debt they have. While running a credit check, look for the debt they have accumulated. A high amount of debt indicates the tenant may have other costly bills to worry about each month, potentially making it difficult to make full, on-time rent payments to you. A potential renter that has low debt but does not have an income three times the rent may have a greater guarantee of making full, on-time rental payments in that case.
Checking the criminal history is vital when looking for a good tenant. In order to check on criminal information, you need the tenant’s name and date of birth. Be sure to check the potential tenant’s ID to ensure the information they are providing is accurate. A criminal information is a public record; however, since there is no nationwide database for criminal records, it may be easier to hire a tenant screening company to search the criminal databases in your state and across the country.
Stability is a good indicator as to whether or not a tenant will be reliable in making on-time rental payments and being a long-term leaseholder. By looking at past rental and job history, you can see whether or not the tenant has a stable life and income. Moving several times or being inconsistent with employment in a short period may raise a red flag. A good tenant has a steady life.
Good Rental History
Rental history allows you to get a glimpse on whether the individual made a good tenant in the past. Ask for information on where they are relocating from and why they are moving. You can also ask for contact information to speak to at least two of the tenant’s previous landlords. It is important to speak to at least two landlords because the most recent one may falsify information in order to get the tenant out of their current location. Ask landlords questions such as if their rent was on time if they gave at least 30 days notice before relocating, and if they maintained the property.
One of the best ways to tell if an individual makes a good tenant is if they are respectful. Not only does a good tenant pay the rent and other bills on time, but they take care of maintenance issues that are their responsibility. If they respect you as a landlord, they will alert you if something needs your attention. You can indicate if they are respectful tenants by asking their past landlords if and how they cared for the property. Did they cause damage? Were there complaints from neighbours? A tenant that is not respectful will likely try to take advantage of you by making late rental payments, coming up with excuses about damages, or simply neglecting the property. You can tell whether they respect you by how professional they were when they reached out to you regarding the property. Did they arrive on time to tour the property? Were they helpful during the application process? Remember, a respectful tenant will shine through in the future as a good tenant.
Having your money invested in a residential property means that maintenance is key. A good tenant will help protect your investment by taking care of the property and keeping it clean. The bigger the mess the tenant makes while renting, the more you will have to deal with when they move out. One way to check if a tenant is clean is to drop by their home unexpectedly or walk them out to their car and take a look. You want to ask their previous landlords about the condition of the property during and after the tenant’s lease.
As you are searching for a good tenant, be sure to refer to the laws and regulations regarding tenants and landlords. Although finding a good tenant is important, it needs to be done in a nondiscriminatory manner. Use a potential renter’s application as your line of defence for weeding out undesirable tenants. Staying true to the application process will help you avoid a loss on your investment property.
Strong financial stability
You’ll require tenants who can pay their rent on time. When you work with a property manager, they’ll know what due diligence needs to be performed to ensure your prospective tenant can pay the rent. As a rule of thumb, an employed person should have been at their current position for three months or more. A self-employed person should have three tax returns completed to demonstrate financial stability. There are exceptions to this rule, but you’ll need prospective tenants to provide further proof of income if this is the case.
Pride in appearance
Decorating and furnishing the home is almost an Australian past time, but not all tenants will behave respectfully. A high-quality tenant will want to treat your home like their castle, and as a place for them to take pride in when they have family and friends over. Of course, it can be hard to assess this from a rental application. That’s why it makes sense to pay attention to a prospective tenant’s character when they attend a rental viewing. Their appearance will give you a lot of indicators as to how they’ll treat your property. Do they appear reliable, presentable and approachable? If your prospective tenant takes pride in how they present themselves, chances are they’ll extend that same care to your property too.
Rental history and positive references
A strong rental history includes a few factors. Did they pay rent on time? How many properties have they rented before, and how long have they been in each property? Did they have loud parties? How was their communication? You or your property manager will want to speak to their landlords, previous real estate agents and personal references to get a well-rounded perspective of their character.
There are many attributes that will make up the perfect tenant for you, and we haven’t listed them all here. But with a wish list of must-haves, a good judge of character, and the right tenant screening process, you’ll be far better placed to make the best decision for your property and your future.
Doing your due diligence and calling previous landlords and personal references are important when deciding whether or not you’ve found a good tenant. Past landlords have nothing to lose by speaking about their old tenants, and if a landlord speaks highly or positively of them, that person is probably going to be a good renter. Speaking to employers, friends, and other personal references is a great way to gain insight into who this person is outside of being a tenant.
Long Term Plans to Live in Unit
Sure, a year-long lease is a great start, but you’d love for a tenant to rent the unit for as long as possible. It can be not easy to know whether a tenant will want to l extend the initial lease terms, but some people do express long term plans. The more committed a person seems to live there for multiple years, the more likely they are to be as invested in the care and maintenance of the rental as you are.
They Ask You Questions, Too
Making sure you’ve asked all the right questions and covered all your bases is crucial to the rental process, but don’t forget that your prospective renter should want to know about you, too. A good tenant will want to know your history as a landlord if this is your only job, how much time you dedicate to your rentals, and a variety of other things. The more they want to know about you as a landlord, the better. Check out our range of Melbourne home builders for your dream house.
There’s no one way to know if you have found the perfect renter, but these qualities can be good indicators. Take the time to review all application materials, dive into their personal and financial background, and pay attention to mannerisms and character traits; you’ll find a good tenant in no time.
House-proud occupants that consistently pay rent on time. That’s what we all fundamentally want. Anything beyond that is usually subjective, which often depends on what kind of landlord you are, or want to be. Over time, through experience, most landlords form their blueprint for what makes an ideal tenant.
But the irony is, landlords don’t know whether they’ve got a good tenant until the final inspection is complete, the deposit is fairly handled, and the tenant has vacated. And that’s because many healthy landlord/tenant relationships turn to a shower-of-shit at the very last moment when it’s time to assess damages and process the deposit. After all, it’s so damn easy to unknowingly get lumbered with a landlord that will do everything within his power to claw back every last penny by claiming compensation for every trivial and unjustifiable bullshit blemish, or on the flip-side, a tenant that’s willing to kill before taking any responsibility, despite how bogus the circumstances.