Top 10 Tenant Selection Mistakes
When it comes to selecting the best tenant for a property, it’s about finding the right balance between:
- Common Sense
- And sometimes just a smidgen of detective work
Save yourself time, and save your landlords potential risk, and ensure you don’t make the following mistakes:
- Not collecting a minimum of 100 points of identification, which must include at least one of each of the following – Photo ID, proof of income, proof of current living arrangements
- Calling mobile numbers for references – Wherever possible, ask for a landline number that passes through the company reception. Ask to speak with payroll or accounts for income confirmation. For small businesses, go to extra effort to verify the phone numbers provided and that you are indeed speaking with the business owner – not the applicants best mate!
- Only emailing the portfolio manager for rental reference. Remember, email references may be efficient, but phone references often include much better detail on the quality of a tenant when it comes to general behavior, the vacate process and overall feedback on the tenancy.
- Accepting the application on face value. Income should be supported by written and verbal evidence. Self employed applicants need to demonstrate financial ability to pay the rent, by way of bank statements and previous tax returns.
- Not using the rule of thirds – as a rule, the rent of a property should not be any more than 1/3 of the total income of the applicants.
- Accepting that a private landlord referee is the rightful owner of the property without confirmation. Use RP Data or other property records to verify ownership details and conduct further investigation if the details don’t add up.
- Forgetting to pay close attention to all previous addresses that may be listed on bills, bank statements or credit card records. If these are not in the tenancy application, you need to know why!
- Considering parents and personal references as a valuable source of information. Yes, for first time renters they may the only option, but it wouldn’t be the first time a Mum or Dad told a white lie to help the kids fly the coup. Consider follow up questions you can ask the employer to supplement the application.
- Discounting first time renters immediately – If no one ever rented to young renters – no one would ever leave home. Everyone needs to start somewhere, and first-time renters can be some of the best renters. Consider a shorter lease term or co-applicants.
- Underestimating good old google – the world wide web holds more information on each of us than we care to admit. Googling your applicant can often fill in the blanks or tell a story you may need to know.
The final piece to A+ tenancy selection if getting your dialogue right.
Click here to download our leasing dialogue cheat sheet.