I have an apartment in the city. I bought it, but I barely own it. Somehow the bank lent me ALL the money to buy it. Well, I say somehow but I had heaps of equity in my own home and I got a favourable valuation and purchased under that so they were happy. I mostly manage the property myself and I’ve been really lucky in the quality of the tenants it attracts.
Today I handed over the keys to a really happy couple, full of laughter and just relieved to be living in the city. No more commute for them. They are even going to sell one of their cars and start walking to work.
Being a landlord actually feels really good to me. My tenants can afford the rent and the rent is satisfactory towards servicing my debt. Win! My tenants need a place to stay handy to work and I need people willing to pay to rent my apartment. Win! I want my place to be well maintained and my tenants want to rent a nice place. Win! I have a car park, they need a car park. Win! Its wins all round. As with any decent business relationship both sides should be wining. (IMHO anyways).
Finding tenants is not something I thought I could do easily so I outsourced it to an agency in the city. They are know as “the” place to go to find apartments but man they are terrible. Just useless. Well they are good at screening tenants and thats what matters (just useless at the admin and communication stuff).
So I need to make plan for next time to screen and assess tenants myself. I’ve made a list of the things I need to attract quality tenants next time. It seems to me to be a mixture of making your property look as attractive as possible so the right tenants apply and covering your butt by doing background checks and calling references.
My Find Awesome Tenants Plan
- Advertising – I’ll advertise on trademe. Cost is $139 – 238 depending on how much extra promotion I pay for. (I’ll need to research if there are other places worth listing the apartment with as well). Good photos are important and I have a set of really nice pictures from when the apartment was staged for sale, I can’t use those forever though so at some point I’ll need to get some photo’s taken. It’s worth getting quality pictures to show your place in its best light, taking a few snaps with your iPhone might not cut it especially if you have to take pictures on an overcast dull day. I’ll lay out all the criteria I require for tenants and list the the paperwork/photo ID they will need for a pre-tenancy application.
- Check if any appliances need replacing or refurbishing – The bench top and cook top are on my list for improvements in the next year or two. (Ahhh thats going to be expensive!) The rest of the appliances are near new high end models that should last another 5 years at least. Quality fixtures are attractive to tenants.
- Credit checks – I’ll let them know in the advert that all applicants will undergo a credit check. Cost $12-48 each. There are a number of places offering background checks online.
Tenancy Information New Zealand – comprehensive search, higher fees.
Name Check – Looks basic but cheap and easy to use.
Tenancy tribunal records – Free to check.
Centrix – Cheap, credit reports and tenancy check.
The application has to include a waiver so you are free to do these checks. Tenancy Services has a very helpful website for both landlords and tenants and lots of forms that I can download including a pre-tenancy application form.
- No previous evictions – Never ever, no way no how.
- Proof of employment and income – Preference given to those with proof of employment, payslips, employer as a reference etc. Income of the tenants should be at least 3 x rent. Ability to pay is crucial.
- Reference from previous landlord – This will also be included in the advertisement as beneficial for any applicants.
- Highlight the buildings location and walk score – It’s close to the city hospital, university and heaps of large corporate employers. You can easily walk to events, shops, restaurants and bars.
- Ask “Why are you moving?” – Look for signs of hesitation when answering and general signs they applicant may be not be telling the whole truth. My last tenants moved into the city because their office was relocating to the city. Great Reason!
- Check facebook, twitter, instagram, linkedin etc – Social media can give you a lot of insight into a persons character. Are they working? Are they throwing loads of drunken parties? Maybe pictures of their previous address, are they tidy?
- If I get a chance check the car – Not how fancy it is, but how tidy it is inside. If there is an ankle deep layer of McDonalds rubbish in the back they are not very likely to keep my place clean either.
- Plan for open homes – have pre-tenancy forms ready and a laptop connected to the internet. I can do credit checks on the spot and be ready to give potential tenants an answer asap. It will give the impression that I like things to happen quickly (a good quality in a landlord) and that there will be no pulling the wool over my eyes! I will check you!
- And finally keep discrimination laws in mind – Sure I can pick who I want but I can’t discriminate based on gender, race, if there are children, religion, sexuality etc. The things I am most concerned with is ability to pay/history of ability to pay and that a suitable number of persons applying to live in the property.
Damn thats a hell of a list. But I’m sure I’ve missed something! Have any ideas for a thorough screening process?