Over the next few weeks we will look at the 14 Fundamentals Of Effective Property Management with Changing Places CEO and Founder, Cameron Fisher.

Last week we looked at Rental Appraisals – a realistic approach, this week we discuss Tenant Selection – digging deeper.

When picking a tenant it is very important that they hopefully stay a long time, pay their rent on time, and don’t do any damage to your property. A great deal of work should go into the tenant selection process, and it’s very important that this is done properly. For example the Changing Places Tenant Application Form is five pages long. We complete the 100 point check, including sighting passports and drivers licences, we thoroughly check information supplied including employment history, both past and present, previous landlords, whether they have owned property as well as make contact with personal references, including next of kin. We gather as much information as we possibly can. We also use tenancy databases, so we can find out whether there are any judgements against the prospective tenant, or whether they have debt outstanding that hasn’t been paid. It’s really important to find out as much as we can. We will talk to their previous agents, we’ll ask whether they would rent a property to them again and we will talk to their employers to see how long they have been employed. We complete these checks very carefully as there have been many instances of prospective tenants providing false information. We need to get to the bottom of any concerns but if we are still not sure, we would rather not have them. This is all done in consultation with yourself, the landlord. Sometimes, we will have instances where they may be a professional couple from overseas and you can’t get the information as readily as you wish or they might be first time renters who have just moved out of home so they don’t have the longest employment history or any rental history. In some of those circumstances, if we are struggling to get other tenants, we may come to you and say, these people present very well, everything we have gone through with them is fine, but they haven’t got a substantial history of previous employment and tenancies. What we might do, is suggest that we may ask for a much larger bond, the equivalent of two months’ rent instead of one month (as long as allowable by law), or we might even get three to six month’s rent in advance. Sometimes parents are also asked to go guarantor for younger tenants who are about to move out of home. This provides comfort should something go wrong.

Related Article: How To Find A Great Tenant

We took over the management of a property from another agent where the property had only been inspected by the agent once in the previous five years! When the tenant vacated soon after we took over the management we found quite a bit of damage had occurred over this time. Initial poor tenant selection by the original agent and lack of routine inspections had cost the landlord dearly. We then secured a new tenant, whom we thoroughly vetted and who paid six months’ rent in advance. After the first three month inspection, we conducted inspections every six months going forward to make sure the property was being adequately maintained as is our standard practice, giving the landlord a sense of ease after a disappointing and costly experience.

Related Article: Qualified Staff – sales skills as well as technical skills

In another example, Changing Places were responsible for leasing 11 of 12 townhouses in Bonbeach Victoria. Just one of the twelve owners decided to go with another agent. During the leasing process we came upon, what appeared to be a good tenant, for one of the townhouses. However, on checking the prospective tenant’s references some alarm bells sounded. We then really drilled down into the tenant’s past history and references and found the prospective tenant was not who he made out he was: he had a restraining order against him from a neighbour at a previous address and his referee when pushed, said he if he owned an investment property he would not lease it to the prospective tenant, his friend! Needless to say, we did not lease the property to that prospective tenant. Then, at a leasing inspection at the property, our property manager ran into the property manager from the company who was looking after the only property we missed out on, who joyfully exclaimed she had just leased her townhouse. We asked was it the tenant we rejected, provided his name and she said yes. Only months later we heard the tenant had skipped, owing more than $2,000 in rent, having done thousands of dollars damage as well and had caused aggravation to other tenants. Simply it pays to thoroughly check rental applications.

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