Friday, August 08, 2014

Is no previous rental history a deal breaker?

For any Landlord, finding and keeping a quality tenant is key. These are tenants, who treat your property like it is their own, are diligent with rental payments and love living in your property.
As an owner, it can be difficult looking through applications trying to work out what the tenants will be like. Just like applying for a job, it's important for a tenant to make a good impression. 

In our world, an open inspection is a great opportunity for tenants to do so, as well as providing a complete rental application.

So what if you see an applicant that hasn't rented before?

Some properties attract tenants who don't have any previous rental history, or tenants who are unable to earn a full-time income.

University Students looking for their first rental property are an example of this; it can often be quite difficult for these tenants to secure a property.

If your investment property is one that is suitable for this type of tenant it can be a huge advantage in the market place.

Areas such as the Adelaide CBD and city fringe have investors who actively focus on this market and make the most of the peak periods of demand in January/February each year.

Landlords will typically include built in robes, appliances such a washing machine, fridge and some furniture in these properties, as they are more attractive to students or first time renters. Key items like this can often make or break the deal as Students are looking to avoid purchasing any expensive items. 

In the last 10 years, international students have increasingly been flocking to Adelaide to study with the number of students in excess of 31,000! Many of these international students have been left searching for accommodation for up to 2 months.

Setting up your property for first time renters can be a very profitable strategy.

Peak levels of demand are seen in January and February for these properties and it's not uncommon to receive 10-15 rental applications; these properties experience minimal downtime. 

So, how do you pick the right tenant?

Choosing the right tenant foryour property is an important decision for any owner. 
From our experience, a good application will:  

1. Include a cover letter that provides more background information on the applicants. 

2. Include all the supporting documents and information required. This helps confirm what is written in the application from a 3rd party.

3. If the tenants don't have a previous rental history or are not working full time, see if they have provided a guarantor.

Being new to renting doesn't need to be a deal breaker. 

A quality application can provide comfort that a tenant is capable of meeting rental payments and treat your property well. The key is to ask the right questions and to ensure you have the full picture before making any decisions. 

Chat to your property manager and they will be able to steer you in the right direction.

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