owning an investment property

OWNING an investment property can be smooth sailing, unless of course you rent it to the tenants from hell.

They might have scrubbed up okay at the inspection and all their paper work and references sound great, but how can you be sure they will stay that way?

According to CEO of LocalAgentFinder.com.au Matt McCann one of the biggest headaches landlords face is troublesome tenants.

“A crucial part of the return on investment to these properties is finding and keeping good tenants who will pay the highest possible rent, but also pay on time and take care of the property as if it were their own,’’ he said.


Follow these ten tips to avoid tenants that nightmares are made of:

Find the right property manager

They should be experienced and have previously dealt successfully with problem tenants. Make sure they attend inspections and have a good strategy for vetting applications and monitoring rental arrears.


Update your property

By keeping your property in the best possible condition, it will keep you ahead of the competition and make it more appealing to someone who will want to take care of it.


Set the right rental price

Keep it in line with similar properties in the area or other landlords will gain a competitive edge in the search for good tenants. Do research and speak to your agent about the current market and what similar properties in the area are being rented out for.


Consider a short-term lease

If you’re not 100 per cent sure about a potential tenant start out with a shorter lease for a trial period. If everything works out – extend it – if not say goodbye.

Related article: Lease Agreements – providing protection for you


Check your agent has run a credit check

It’s a good idea to include a credit check in the screening process as it is usually safer to choose a tenant who has good established credit. The property manager should check if they have paid rent late before. It is also a way for your agent to check previous addresses they have rented out. If that doesn’t match up with their application they could be trying to hide something.


Do reference checks

You’d be surprised that some property managers take what potential tenants take on face value and don’t do all the checks they should.

Check with former landlords and current employers to check on the stability of their income.

“When verifying an employer reference, it may be better to look up the company’s number in the phone book to ensure the applicant’s true employer has been reached, rather than a friend,’’ Mr McCann said.

“This approach may seem extreme, but a few applicants may know their way around the screening process.’’


Check the applicant against a tenant database

Many agencies have access to a tenant database run by private companies which reveal whether or not a tenant has had any legal actions filed against them.


Take photos of everything

Do this before anyone moves in. Give a copy to all parties, it’s a useful deterrent for any potential false claims of damage.


Inspect regularly

Make sure your property manager carries out regular checks to ensure everything is as it should be.

Related article: Routine Inspections – look for red flags


Consider landlord insurance

This is to protect the owner against loss, theft or damage.

Related article: Landlord Insurance – sleep easy at night


This article was originally published by Michelle Hele on the 20 DEC 2016 via realestate.com.au


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