Starting a tenancy

How to Choose a Good Tenant

How do you know if a tenant is going to be good? Do you figure this out based on how they talk or the way they dress? Or do you simply rely on what your gut tells you? It's important to take in as much information as you can about your potential new tenants, starting from the moment they call about your property to the moment you hand over the keys.

Once you hand over the keys and sign the lease there is no going back. If you have made a bad decision it's very hard and costly to rectify the issue, so get it right from the start.

To determine whether a tenant is right for your property there are 3 stages you need to go through, and important things to look out for at each stage.

Stage 1: Before the Inspection

After you’ve advertised your property, you should expect a number of phone calls from prospective tenants. This is the first opportunity for you to gauge whether they are going to be the right tenants.

While they are on the phone, take note of how they talk. Are they pushy, bossy or rude? Or are they genuine, polite and sincere? If you're on the phone to the prospective tenant and they are demanding to view the property without any regard to what you're saying, this generally tells you they are going to think only about themselves when a small problem arises during the tenancy.

Stage 2: During the Inspection

At this stage, most tenants would try to put on a show to convince you that they are right for your property. This is where you should be cautious. Try to read between the lines and see through the pretense. Try to assess their personality based on your conversation, just like how you did over the phone.

More importantly, look at the things that are hard to fake, like their body language, their clothes, if they’re healthy and even the condition of their car. I believe if someone looks after themselves and their belongings, there’s a good chance they will take care of your property.

Stage 3: After the Inspection – The Application

Ok, so you’ve shown them the property and you’ve had ample chances to determine the type of people they are. Now it's time to take away how you feel about them and look at the cold hard facts to answer two important questions:

1. Can they pay the rent?

If you ask this question to them upfront, they’re going to obviously say that they can. That’s why you must refer to the application for proof. If available you can check their rental ledger showing all the payments they’ve made while living at their current rental property or ask to see bank statements or financial tax returns. The more information you have the better. It is also critical to speak to their current and previous property owners or managers and their current and previous employers to verify the information they have provided in the application is correct. I like to think of it this way, the proof will be on the paper and backed up by their references.

2. Can they look after the property?

This question may not be as easy to verify as the first one because this will not be written on paper. What you can do instead is rely particularly on what their previous property owners or managers have said about them when you ask if they looked after the property.

Personal references can help, however I generally don't give that much consideration to personal references except to establish the sort of people they associate with. Be conscious of their answers and see if there is consistency. If their answers are generally positive, then you’re off to a great start.

If you need an application form to provide to your tenants take a look here.

Put Pressure on Them

Ok, so you have checked the application and everything is looking good. At this point I like to ask for more information. For example, more identification or preferably something relating to income like an extra payslip. This can be a little confronting and slightly frustrating for them and to be honest, thats the whole idea. How they react to confronting or frustrating situations can bring out the real person you are trying to find.

Important Note

An important thing you have to remember: Do not discriminate against tenants on application. The law clearly states that you cannot discriminate against someone based on gender, age, religion and ethnicity. These factors should not be part of your basis when selecting tenants. Focus instead on the above-mentioned things: Can they pay the rent? and Can they look after the property?

Final Thoughts

Your last line of defence is your gut, so after taking care of everything mentioned above it's time to rely on your gut feeling about them. If something doesn't seem right, it generally isn't.

It's so important to find good tenants, after all they will be living in your property and you will be relying on them to pay rent every week so don't make your life hard by taking the easy way out now.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

More free guides

Landlord Academy
Get FREE tips delivered to your inbox every week.
You're in. We send them every Tuesday.
Oops! Something went wrong while submitting the form.
We promise not to spam you