Probably the greatest concern for both new and experienced property investors is whether or not they will manage to find (and keep) good tenants.
These are all valid questions.
Choosing the right tenant can have a significant impact on property owners overall financial outcomes. For this reason, it is absolutely critical that property investors have 100% faith in the process undertaken by their property manager in the choice and handling of their tenant.
After many years of providing professional services to property investors, Otto Property has developed what we believe is an unrivalled level of service and industry best practice. We ask our clients to consider the following steps in securing and keeping a high-quality tenant.
Buy a great property.
As simplistic as it might seem, the better the property, the better the tenant. Although this cannot be guaranteed, there is no doubt that high-quality properties, attract better tenants.
If you purchase an investment property that people want to live in and in a high demand suburb, then the chances are that you will have a number of potential tenants to choose from. New, clean and modern homes in good suburbs are always in high demand. Keep this in mind and choose wisely when purchasing an investment property
Keep your property well maintained
The condition of your property is the first thing that potential tenants will notice. There is, without a doubt, a direct correlation between new potential residents that are seeking well presented and maintained properties and those that look after their properties to preserve this standard. The opposite is also true.
The initial presentation of your property is the first step in setting the standard for how you expect your property to be maintained.
Set a price that is competitive
Some landlords and agents wrongly believe that by setting a higher than market price for their rental property, they will attract better tenants. Our experience is that rental properties are extremely price sensitive. Most tenants in the marketplace have already decided upon a weekly rental budget and most do not deviate from this. Therefore, if they view your property online and it doesn’t meet that budget, then they will probably not come and look at it. The more people that come to your property, the more choices of applicants you will have so it is best to try and attract as many people to view the property as possible
Market your property professionally.
The best way to attract great tenants right from the outset is to provide good quality photos, with a floor plan that shows how great the property really is. Poorly lit photos taken by property manager’s smartphones just aren’t good enough. If you want to attract great tenants to your property and encourage them to attend an open inspection, then the marketing must be professional.
The photos, the floor plan, the description and an accurate summary of rental costs go a long way towards starting the process right.
Open inspection etiquette
In many ways, the open inspection for a rental property is much like a group interview for a job. We look at things like punctuality, personal presentation and interaction, how people conduct themselves and most importantly, how they respect other people’s property.
You can gain a great deal of insight into how potential renters behave at this point. An applicant may look great on paper, but first impressions are hard to fake. It is for this reason that you should never accept a rental application without first meeting the applicant face to face.
Detailed and lengthy application form.
The tenant application form that Otto Property uses resembles a home loan application. And so it should! After all, you as the owner of the property are handing over the keys to one of your most important assets probably worth $400,000 or more.
We want to know our applicant’s rental history, employment status, personal details and we wish to speak to at least three business and personal referees. Moreover, we require 100 points of identification so that we can verify that the applicant is, in fact, who applies and will live in the house!
Make extensive enquiries on history and background.
After collecting all of the above information, the next step is actually to check it. This may sound obvious, but many landlords would be surprised how few property managers actually take the time to make all of the phone calls necessary to complete all enquiries.
The chances are that if the applicants have the propensity to do the wrong thing, they most probably have done so in the past.
Now that you have found the perfect tenant, one of the most important factors in keeping them long term is effective two-way communication.
By establishing clear communication policies and procedures and of course communicating these effectively is a great place to start.
Your new tenants should know the best way to facilitate maintenance requests, rental matters and any other property related issues including emergency procedures should they arise. All communication should be answered in a prompt and complete fashion with maintenance issues addressed as soon as possible.
This will set a precedent for how you expect them to respond to you when you need to speak with them should you need to organise inspections, maintenance work or any money related issues like water bills or rental arrears.
This is, without a doubt, the cornerstone of any long-term successful relationship, whether it be professional or personal. Tenants have the legislated and moral right to the peaceful enjoyment of their home. Whilst they have a number of obligations and standards to adhere to whilst residing in the property there are also obligations and responsibilities that go the other way.
In our experience, the best outcomes that can be achieved with successfully managing rental properties starts with treating all tenants with the utmost respect and dignity. This, in most cases, is appreciated greatly by them and in return, this attitude is rewarded quid pro quo.
Unfortunately, some landlords and property managers don’t work with this in mind and can result in poor relationships with tenants and poor financial outcomes.
The 9 points detailed above should provide the basis for any competent property management company to go about finding and keeping great tenants. After many years of experience in managing our clients investment properties, we believe we have discovered the secret and methodology to achieving great results in holding on to good quality tenants, for the longest possible time.
Daniel Otto has been a part of the property industry for over 15 years, with experience that stretches across real estate sales, investment, rental management and development.
Please reach out if you have any further property related questions.