October 18 2022
"As vacancy rates decline and rental properties become more and more competitive, landlords are able to choose the best tenant for their property." - Marco Zande, Strategy Executive
An investment property can be a huge asset, but to make that asset as stress-free and profitable as possible, finding good tenants is key. A big part of finding good tenants for your investment property is choosing an attractive property and pricing it competitively.
What makes a good tenant?
Good tenants can make a landlord’s job a lot easier. A good tenant possesses a range of different qualities: from paying the rent on time to communicating any maintenance requests with the landlord or property manager, keeping the property clean, and treating it like their own - a good tenant should tick all of these boxes.
But it can be hard to know whether a potential tenant ticks all these boxes, and how do you attract them in the first place?
How to attract the right applicants
Spending a little extra time and money in creating a good property and marketing it well is one of the best investments a landlord can make. Here’s how to attract good tenants to your investment property.
1. Ensure your property is attractive to tenants
The first and most obvious consideration when buying an investment property is location. You’re not likely to attract many tenants, let alone quality ones if your property is in an undesirable location. Being close to amenities like schools, universities, public transport, retail centres, parks, and so on will increase the rental value and attract better tenants. You also want to consider the neighbourhood - is it safe? What are the crime statistics? Is there a lot of public housing in the area? It’s a good idea to chat with local agents and use websites like Homely to research suburbs.
It’s also important that your property has the right features that enable you to charge a higher rent that will also attract good tenants, such as:
- Air conditioning/central heating
- Pet-friendly
- Outdoor area
- Fully fenced yard
- Good quality kitchen
- Quality shutters/blinds
- High-speed wifi
- Parking
2. Price the property competitively
Don’t make the mistake of thinking that if you charge the highest possible rent you’ll attract higher-quality tenants. It’s about striking the right balance between attracting enough tenants to apply and getting the rental yield you want. Once you’ve put the property on the market, you’ll want to monitor how it’s performing and readjust the price accordingly.
3. Have professional photography
Don’t let yourself down in the advertisement by having amateur photographs. It’s always worth hiring a professional photographer for real estate photos. If your property has a beautiful sunlit courtyard or a recently renovated kitchen, show it off! It’s also worth bringing it to life with a video tour or a 3D tour to really enable potential tenants to visualise the space before viewing it in person.
4. Understand your target demographic
To get good tenants, you first need to understand what kind of tenant you’re trying to attract! This clue will often lie in the property itself. If your property is located near universities, you’ll need to adjust your marketing to students and young professionals. Similarly, if the property is located in the outer suburbs near schools, you’ll need to adjust your strategy to families. Or, if you have a spare room that isn’t quite big enough to be a bedroom and you want to target professionals, you may want to consider advertising it as an office (rather than a nursery) to attract professionals who work from home.
It’s important not to risk advertising the property too generally as you’ll miss your target demographic altogether.
5. Conduct reference checks
Once you’ve whittled down the list of potential tenants, ensure you do reference and background checks to avoid winding up with a nightmare tenant. Speak to their previous landlords to get an understanding of how they treated their previous rental and if there were any issues. Also conduct an employment check (most rental applications these days require at least three payslips), criminal history check, and so on. You can never be too careful.
6. Use a good property manager
Investing in a good property manager can be invaluable when finding and attracting good tenants. Property managers can take care of the background and reference checks, and can help provide hassle-free property maintenance.
Source: Your Investment Property