An investment property can be an attractive financial proposition, but finding the perfect tenant is a crucial part.

A good tenant will be profitable forthe landlord, whereas a bad tenant can be costly for everyone.

RealRenta has established policies and procedures to help you ensure that prospective tenants are screened thoroughly and effectively and that bad tenants are avoided at all costs.

Here are some insights

Verify their income

The perfect tenant will be financially responsible and will have sufficient means to pay their rental obligations in full and on time. A higher income does not necessarily equate to a greater ability to pay rent, as the tenant may have borrowings and debts that require monthly repayments, so it is essential to do an in-depth assessment of their income and financial obligations.

Check their rental history

It’s vital to check rental history with at least two previous landlords or property managers to assess a tenant’s suitability. Some of the questions that should be asked include:

Was the rent paid on time?
How long did they rent the property for?
Why did they move?
How did they treat the property and was there any damage other than regular wear and tear?
Did they have a good relationship with their neighbours?
Were there any lease violations?

A perfect tenant will have an impeccable rental history thatdemonstrates that they paid their rent on time and in full, and that they treated the property with respect and care.

Do a credit check

RealRenta can run a credit check through the National Tenancy Database and sent you a report on the tenant. Clearly, a perfect tenant will have a blemish-free credit record.

Contact references

One of the biggest mistakes that ownerscan make is inadequate screening of prospective tenants. It can be time-consuming to personally contact references, but this is a vital step in the screening process because it provides an opportunity to get answers to important questions. For example, you can get an idea of a person’s history and the status of their current position from an employer –all of which is crucial information in terms of finding the perfect long-term tenant. RealRenta can also do this for you (for a fee).

Establish motivation for renting the property

By asking applicants the right questions, it is possible to ascertain whether they are likely to stay in the property for the long term, which is Gold for property investors. Find out what links they have to the area and what the reasons are behind their choice of suburb. Someone with family living in the area, or whose workplace is within easy reach, or who has children who attend a neighbourhood school or nearby university ismore likely to be a stable, long-term tenant.

One of the keys to finding the perfect tenant is making sure that every application is thoroughly reviewed and that there is no room for ambiguity or misunderstanding. In short, the perfect tenant is one who: