Tenancies part 1- finding a great tenant

Tenancies part 1- finding a great tenant

As a private landlord, finding and securing a top quality tenant is key to the enjoying peace of mind from your investment. Establishing and maintaining good communication from the outset is a key consideration when managing your own property.  From the way you advertise your vacant property, the process by which you select and screen potential tenants, to the priority you place on maintaining the property, approaching the entire relationship with clear, open and honest communications is the best way to ensure a long and prosperous tenancy.

Given the importance of proper conduct when managing any tenancy, combined with the fact that about a third of Australians rent property, every state and territory has legislation that governs the manner in which residential tenancies must be managed.  From time to time, the legislation is reviewed and, where deemed necessary, amended.  Western Australia’s residential tenancy legislation was reviewed a few years ago, with more close to 100 amendments coming into force from 1 July 2013.  Currently, the Victorian government is reviewing its residential tenancy legislation.  One thing that often goes hand in hand with a review of residential tenancy legislation seems to be large increases in fines for procedural breaches in relation to the management of property.  The legislative requirements of residential tenancy laws – and the penalties for breaching those laws – apply equally to private landlords, real estate agents and even tenants.  Typically, where legislation introduces large increases in fines for a wide range of possible breaches, the step that usually follows is enforcement.

If we look to Western Australia as an example, when the amended residential tenancy legislation came into effect on the 1st of July, 2013, it brought with it large increases in fines. The maximum penalty for certain breaches increased from $4,000 to $20,000.  As an industry, real estate agents quickly familiarised themselves with the new requirements as part of their daily operational and licensing requirements.  Private landlords remained, as they are throughout Australia, largely unaware – both of their legal obligations in managing a tenancy and of the enormous number of newly introduced amendments to the legislation.  Initially there was somewhat of a reprieve but recently, a number of breaches by two WA landlords have attracted significant fines.  In October last year, a Perth private landlord was fined $24,000 and a second was fined $7,200 in March of this year.  The real lesson to learn here, is that breaches are easily avoidable.  Following proper procedures relating to communication, documentation, inspecting and maintaining the property and handling of bond and rental money all help landlords to remain compliant with the residential tenancy laws in their state and minimise the likelihood of problems. 

How to attract the best tenants

The first consideration needs to be in relation to where you advertise your property.  Whilst there are various options such as newspapers, community notice boards and general online classified forums, landlords who are serious about renting their investment property long term and finding quality tenants should advertise on websites that specifically cater to renter needs.  Research indicates that 85% of tenants now only look online* so it makes sense for landlords to advertise where the tenants are looking.

A well placed and presented online rental ad is a crucial starting point to attracting the best tenants.  To highlight this point, landlords can list their rental property ad on rent.com.au for free for a limited time.  If their property is not yet vacant, they are still able to register and put in an indicative future date and have the free listing offer extended to allow them to experience the benefits at a future date.

The next consideration in attracting a quality tenant involves how the property is presented and that it is priced correctly.  The aim of a successful online property ad is to attract and inform the prospective tenant and encourage strong property enquiry.  For landlords writing their own property ads, having the right message, quality photos and professional presentation is fundamental to success.  It is vital to highlight the best features, use words and images that entice prospective tenants to view a property.  We often see listings that have not directly engaged a tenant, showing only a few basic facts about the property and with some very average photos. Landlords then wonder why no one has enquired.  Our statistics show that 31% of renters look for photos showing cleanliness, 22% for design and property features, 46% sort by the number of bedrooms, 25% by type of property, 13% by the number of bathrooms and 11% by weekly price.  These statistics highlight that renters are interested in far more than just price.  Having said that, savvy and intelligent prospective tenants are very much in tune with what the fair market rental amount should be.  Landlords who have any doubts about whether their property is correctly priced within the market can access detailed rental property reports like RentCheck to help them price their property competitively against others in the rental market.  When searching, renters are more interested in extra features such as air-conditioning, lease period, a property’s location and nearby amenities and whether pets will be considered.

The process of selection

Secondly, the process of selection should include taking detailed applications and thoroughly screening potential tenants.  Utilising professional background checking services such as RentReport is essential to confirm they are not listed on a defaulting tenant database or had court judgements made against them.  Similarly, contacting referees to gain an insight into each applicant is very important in helping landlords make the best decision and choose the tenant that best suits their requirements.

*Source: AC Nielsen Online Australian Property Search Report

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