• How to find the perfect tenant for your first property

    How to find the perfect tenant for your first property

    When investing in real estate, the focus is often on picking the right property – but the next step, selecting who will live in it – is just as important. 

    After making many sacrifices to purchase a property (yes, the FOMO is real), the worst thing first-time buyers can do is rush a tenant in, according to Richard Batten, a RAMS Home Loan Specialist from Revesby in New South Wales.

    Richard says while it’s natural to “want to start seeing a return as quickly as possible”, finding the right tenant for property number one is “absolutely crucial”.

    How to find the perfect tenant for your first property_Pic1 - moving boxes
     Finding the right tenant is not easy – but there are a few indicators you’re onto a good egg. Picture: Getty

    “The first step to getting a good tenant is appointing a great agent – and that’s not necessarily the agent who sold you the property in the first place,” Richard says.

    “Test the market, do your own research and ask friends and trusted advisors for personal recommendations for an agent, as they are vital to making an investment property work,” he says.

    “For your investment to be a success, you need a tenant who will look after the property, will pay rent on time, every time, and also stay for a reasonable amount of time – because there are costs associated with re-letting a property which can really impact on your return,” Richard explains.

    After appointing an agent, Richard recommends finding out as much as possible about prospective tenants.

    There are three key areas a good agent will focus on.

    1. Motivation

    How to find the perfect tenant for your first property_Pic2 - shelves
    Understanding your tenant’s reasons for moving in will help you decide if they’re sticking around. Picture: Erinna Giblin

    Ask applicants why they’re renting, Richard says. “This may seem like an obvious question, but it’s important to understand the motivation of a potential tenant,” Richard says.

    “It could be someone who is building a house and just needs somewhere to live for nine months, for example. This is key information,” he adds, “if you’re looking for someone more long-term.”

    2. Employment

    Always confirm an applicants’ employment status, Richard says, because the ability to pay on time is vital.

    Sounds obvious, but assuming someone is who they say they are, and works where they say they do, is a rookie move. As a landlord, you are entitled to proof of employment from your future tenant.

    3. Character

    “Always get references, always,” Richard says. “The previous landlord is the best reference to seek out, but if it’s someone who has just moved out of home, speak to their employer about what kind of person they are.

    “You are entrusting your property to this person, so you want to know as much as you can,” Richard says.

    Don’t stick to one or two options, either. When comparing character references be sure to interview at least five or six applicants, and then you’ll have a better idea of what a winner looks like.

    Once you’ve collated a wide selection of applicants, cross-checked them for character and employment history, and get to the bottom of why they want to move into your property, you’ll be set for a much smoother tenant-landlord relationship into the future.

     

    Originally published on flatmates.com.au


     

    About the author

    • Raymond

      Raymond A Ram is the RAMbassador for RAMS Financial Group. Raymond works with the RAMS team to bring simple, helpful and expert information on home loans and savings accounts to life with his down to earth and cheeky personality. He enjoys seeing everyday Australians turn their dreams of saving for a goal or getting into a home a reality. 

      Growing up in Goulburn, NSW, Raymond was brought up with good old-fashioned Aussie values of hard work and a fair go. It soon became apparent that Raymond wasn't content for the conventional path of grazing, producing the very best wool, and finding a nice sheep to settle down with. So it wasn't long before his passion for performing and his talent as a likeable larrikin shone through - landing him a few roles such as 'RAMlet'. He was even tipped to play RAM-bo at one point but chose to become star of the small screen instead as RAMbassador for RAMS. He now finds this role so much more rewarding.

      Contact your local RAMS Home Loan Centre about your home loan options.

      Raymond A Ram
     

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    The information here is of a general nature only and is not intended to constitute financial or tax advice. You should consult your professional adviser, accountant or taxation expert for advice specific to your personal circumstances.

    The views and opinions expressed in this article are those of the author alone and do not necessarily represent the views or opinions of RAMS Financial Group Pty Ltd ABN 30 105 207 538 (RAMS),  Westpac Banking Corporation ABN 33 007 457 141 (Westpac) or their related bodies corporate. This article is strictly for information purposes only and neither RAMS, Westpac nor any of their related bodies corporate make any representation as to the accuracy or completeness of the information in this article or endorse the views expressed in it.