How Do I Choose the Best Tenant for my Rental Property?
As a landlord, finding the ‘right’ tenant for your property can be a bit overwhelming. You have loads of applications, and several of them are promising, but you don’t know how to go about working out which one is the best fit, right?
We understand your position: it’s not an easy job deciding who to rent your property to. After all, you have substantial capital tied up in that investment, and you’re counting on it to bring you good returns. And on top of that, you need a tenant who is easy to deal with and who will respect your property.
There are instances when you have that ‘gut feeling’ about a prospective renter, but when you’re talking serious dollars, you just can’t afford to rely on your instincts or your sixth sense. It’s up to you to do your research.
Thankfully, there are tools available to make a landlord’s job a bit easier.
What is a Tenancy Database?
A tenancy database is a list of people’s renting history, which is available to landlords. These lists are owned by private companies, and to access them, you must pay a membership fee.
The tenancy database screens and flags potential tenants for things such as:
- Damage to property (including damage through recklessness and neglect)
- Not paying rent
- Leaving the property early and expecting the rental bond to cover any outstanding rent
Other Ways to Check Tenants
Apart from consulting a tenancy database, it’s important that you do your own checks on potential tenants. These could include:
- Reference checks with previous landlords
- Records of previous evictions
- Finding out about the tenant’s employment history
- Verifying the tenant’s current employment status
What sort of Questions Can I Ask a Prospective Renter:
When making your enquiries, don’t forget that there are laws surrounding the privacy of prospective renters. You must be careful how you word your questions, but you also want to find out as much as you can without infringing on their rights.
- What is your reason for moving? – this is a natural enough question, but if your tenant has been evicted from a previous property, it may prompt them to ‘open up’ before you sign yourself into a heap of trouble…
- How many will be living in the home? – as a rule of thumb, 2 people per bedroom is a good number, so it’s wise to make sure your home can host the number of people who will be living there.
- Do you have anything you would like to ask me? – let your prospective renter have a chance to air any questions they may have. It’s important to maintain open, clear and honest communication channels with your renter from the get-go.
What Can’t I Ask?
You are not permitted to ask certain discriminatory questions of the tenant or previous agents, including but not limited to:
- The nationality of the renter
- The marital status or sexuality of the renter
- Religious or political beliefs
- Number of children (or plans to have children)
- Medical history or health conditions
- Age
- If the renter has pets
Whether you’re a newbie or a seasoned landlord, it’s your responsibility to keep up to date with the regulations surrounding landlords and renters. A raft of changes came into effect in Victoria in March 2021, so take a moment to check out our article Your Guide to the New Rental Law Changes in Victoria.
How Much Do I Have to Tell My Prospective Renter?
When a prospective tenant approaches you, you are obliged to tell your prospective renter if you are a subscriber to a tenant database before you run any checks on them.
You must notify them in writing, giving them the contact details of the database owner. These details should also be included in your tenancy agreement.
In the event that your prospective tenant is listed on the database, you must advise them of your findings. They must be told the name of the database, the person who listed them on the database, and how they can check, remove or change the listing.
Wanting more tips on how to ensure you get the right tenant for your property? The team at Love & Co knows all the ins-and-outs of the rental market in Melbourne’s North. And we’re here to help landlords like you get the best return for your investment. Call us today for a friendly chat!
The information in this article is for information purposes only and should not be taken as financial, legal or personal advice.
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