10 tips for investors to attract quality tenants

A property investor needs to be vigilant and proactive. This will ensure that their property consistently attracts high quality tenants and generates maximum profit.

It is important that property owners carry out their own quality checks on potential tenants, be creative in attracting renters and understand the property rental process, even if a managing estate agent has been appointed. Here are 10 tips for attracting quality tenants in a buyer’s market.

1. Work closely with your agent.

The investor needs to double-check the work of his or her agent, doing his or her own quality check. This can prevent problems in the future.

2. Working with more than one agent.

Placing several listings for a property gives the investor the best chance of finding a high-quality tenant in the shortest possible time. Most single agents do not accept multi-listings because they want exclusivity. However, in the case of working with one of the popular investor clubs, this will not be a hindrance as these clubs represent a large pool of property owners.

3. Flexibility in terms of lease periods.

Of course, the possibility of a three-month lease can provide some income from it. However, it is more profitable for the investor to get a tenant for a longer term. If an investor leases a property shortly before the New Year, it makes sense to choose a 13-month lease so that the end date of the lease will be during the peak period – the second week of January. This is usually the time when the market picks up again.

4. Offer incentives.

The investor needs to keep an open mind. Unusual rental incentives such as a gift voucher, dinner for two or double theatre tickets can be a game changer to secure a quality long-term tenant.

5. The rent should be less than a third of the applicant’s net income.

The affordability of the potential renter and the rental history are top priorities. If the rent is more than a third of the net weekly income of the tenant, the investor should not accept the lease. Exceptions are if there are bank savings, a guarantee from a parent and/or employer or a rental history that demonstrates the ability to afford a similar rental rate.

6. Comparison of the established rent with the applicant’s previous rent.

The renter’s previous rate should be similar to the investor’s current rate. If the current rate differs significantly from the previous rate, the figures should be equalised as much as possible.

7. Check breach notices for overdue rents or damages.

Investors should not accept tenants who are in breach of rent or who have received breach notices for property damage more than four times.

8. Checking the tenant’s rental history.

A longer rental history usually means a more stable tenant. There are times when a potential renter has no rental history. In this case, a letter from a respected member of the community will suffice, but it must be written and professionally drafted.

9. Permission to stay with pets.

If pets are allowed in the building, excluding this item from a number of other approvals can cut a large part of the market for the investor.

10. Checking who will live in the property.

The investor should find out who is renting his property – a family, a husband and wife, a young couple or a group of friends. This gives a general idea of who will be living in the property, and this information can be referred to if additional people move in.

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