With rental properties in demand across most parts of Australia, the industry is seeing a rise in the number of renter applications being submitted on properties, which can be time-consuming to choose the best renter for your property. Due to this increase, we wanted to share with you some of the techniques that we use to short-list the best applicants.
When choosing a renter, the top two concerns for investors are whether they will take care of the property and pay their rent on time.
The first short-listing check we look at is to ensure the renter/s can afford to pay the rent. To assist us in doing this, we use the 30/70 rule, similar to what the banks reference during the loan application process. We combine the household total net income and then apply 30% to the affordability of rental payments. For example, if the household’s total income is $1800 (then in theory), they can afford to pay $540 per week, with the other 70% being allocated to living expenses.
We then look at the number of renters wishing to reside in the property, as this can impact the wear and tear on a property.
Depending on the length of tenancy term a rental provider is looking for, we will consider their past tenancies to see if they have been short-term or long-term renters.
Meeting the renters and developing a conversation with them can also disclose much information about the renter, which we are skilled in doing.
Once we have short-listed the applications, it is then essential to conduct a national renter database check to determine if they have breached or defaulted on a prior tenancy.
When processing renter applications, we are careful in the way that we collect reference information to ask open-ended questions and validate the contact details
Once we have short-listed the renter applications, we will then refer all of the relevant information to the rental provider, so we can take instructions on which renter you would like to choose for your property. Getting the renter selection process right from the outset is critical to the ongoing management of your property. Waiting for the right renter can reduce disputes and breaches during the tenancy.
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