Choosing the right tenant for your property
Choosing who you have living in your property can be one of the most stressful parts of being a landlord. Your property may have lot of your own time, effort, and finance in to getting your property just right, and having a “bad tenant” can put this all at risk.
Having insured against deliberate or malicious damage by tenants, we have seen our fair share of claims. From tenants have been just a bit reckless with the property, to the extreme of taking a golf club to the walls.
While having insurance will help get your property back to where it should be, it’s better to avoid the headache altogether by getting the right tenants in place. To help with this, we have prepared 3 tips for selecting the right tenant:
1. Beware of negotiators
Some negotiation can be expected on items such as dates, rent, or lawns. When the tenant is trying to negotiate down a bond, it can raise questions as to their financial position and cash reserves. Similarly, if they start haggling on the credit check or overdue payments, this may be a sign of trouble to come.
2. Rental property is a business
It can be tempting to rent your property to a friend or relative. You know the tenant, and don’t have to hassle with time consuming background checks or other formalities. However if something goes does wrong, you may find yourself in the tough spot of having to take a dear friend or relative to the tenancy tribunal or losing out on income.
3. Watching for the signs
When it comes down to choosing whether or not to select a tenant, there may be some red flags (frequent movers, no professional references, urgency to secure the tenancy) which could be explained. Others – such as wanting to pay in cash, or providing incorrect information/fake references – are a clear sign that this is not the best tenant for the property. Being familiar with the red flags will help you make the best decisions in who you let your properties to.
These points are a general view from claims that Initio has seen over the years. If you have specific queries about a tenant or application, or for further advice on tenants and property management, your local Property Investors Association is a great starting point.