A growing number of Australians are renting. Figures from the Australian Bureau of Statistics (ABS) show that nearly one-third of people were tenants in 2013-14, up from 25.7 per cent in 1994-95.
This is likely good news for anyone who owns investment properties, particularly as the ABS data revealed the cost of renting jumped 4 per cent from 2011-12 to 2013-14.
More than three-quarters of landlords said finding the ideal tenants for a property was more important than getting the best rental income.
But finding the right tenants can be a challenge. Realestate.com.au's Landlord's Need and Wants report showed two-thirds of landlords had previously experienced problems with tenants.
Let's take a look at some of the ways you can prevent your property investment dream from becoming a tenancy nightmare.
1. Screen your tenants properly
More than three-quarters of landlords said finding the ideal tenants for a property was more important than getting the best rental income, according to the Realestate.com.au report. Eighty-two per cent also said they would rather have good tenants than fill the property as quickly as possible.
So how can you screen your tenants effectively? If you don't have the time or the inclination to find tenants yourself, you can choose to enlist a reputable company to handle property management services on your behalf.
2. Watch out for the warning signs
The above measures are a good way to set up a comprehensive process for finding the best tenants, but do you know what red flags to look out for when reviewing applications, references and interviews?
Many warning signs you will be able to spot easily – for instance, if someone is unable (or unwilling) to provide references. Similarly, be wary of people who only offer you contact details for their current tenancy, as the landlord may give a glowing reference because they are keen for the individual to move out.
— realestate.com.au (@realestate_au) March 11, 2017
The alarm bells should also start ringing if:
- The tenant has moved several times in the last few years;
- They find fault with everything, which is likely to continue if they move in;
- They complain about previous landlords;
- You find it difficult to contact them or they ignore your messages – this could become a problem if they are late with the rent; and
- They are in a rush to move in or seem generally disorganised.
If all else fails, go with your gut. Does this person seem like someone you can trust to look after your property?
3. Keep your property well maintained
Your property should be in good condition both before and after you find an ideal tenant. A pristine home will naturally attract more interest, but it's also crucial to keep on top of any problems that crop up to prevent good tenants from moving out.
Six per cent of respondents to a recent report claimed they were forced to leave a rental property because of its unbearable state. Meanwhile, 26 per cent of tenants who chose to end a tenancy said they had a dispute with their landlord over the cleanliness of the home.
— CISA (@CISA_National) March 2, 2017
The research – compiled jointly by National Shelter, CHOICE and the National Association of Tenant Organisations – found several common problems that renters experienced, including:
- Pests, such as cockroaches and ants (27 per cent);
- Doors and windows that don't close properly (24 per cent);
- Peeling paint or slipping tiles (22 per cent);
- Leaks and flooding (21 per cent).
Providing a well-maintained property and responding quickly to renters who encounter problems should ensure you are able to attract the best tenants and keep them.
Would you like to learn more about PI Store's property investment and management services? Please contact us today.