What To Look For in Tenants

There are many ingredients that go into becoming a successful real estate agent. Trying to master all the different pieces of the puzzle can be difficult, but one thing you definitely need to know is what to look for in tenants — because if you get the right tenant, things will go as smoothly as can be expected. However, if you choose the wrong tenant, it can turn out to be very costly and stressful.

It is a good idea to have a checklist of criteria that should be met. That said, we should not necessarily have iron-clad rules, but should assess potential tenants on an individual basis so that good people aren't arbitrarily excluded. Someone may have recently lost their job and is living off savings short term, but they are honest and hardworking. Or someone may be temporarily affected by a health issue, and some compassion would go a long way.

One thing to watch out for is whether the prospective tenant has respect for others' property. One way to gauge this is to see whether they respect their own property.

Ask yourself: What condition is their vehicle in? How do they present themselves — are they clean and tidy, or unkempt? If they don't look after their own belongings, they probably won't look after yours either. First impressions in this regard can be very telling.

Try to work out whether your prospective tenant is a responsible person. Consider what kind of commitments they have at work and outside of work — do they look after other people or animals? Do they follow through on their word, or do they make excuses and prove unreliable?

If your tenant is generally a responsible person, it is likely they will fulfil their obligations under the lease. Should any issues arise during the tenancy, a responsible tenant will typically be much easier to work with and resolve matters promptly.

Another important consideration is whether your prospective tenant is a good fit for the property, taking into account the size and type of the property, the neighbours, and the tenant's intentions behind wanting to rent.

For example, if it is only a small unit but a large family with young children plans to move in, there may be issues with noise affecting neighbours and limited parking. If a tenant is attracted to the property because of a large shed they want to use for a home mechanic business, you may face issues related to power tools, chemicals, and noise — even if that person would otherwise be a good tenant.

Sometimes a tenant will tick all the boxes except one, but that one may be crucial. Ignoring it could be a costly mistake. Consider the whole picture before making your decision.

Tenants need to be in a financially sound position for the duration of the lease. You must verify that they have a reliable and consistent source of income sufficient to cover not only the rental costs, but also other associated living expenses — and that they are able to pay a bond.

As a landlord, your tenants have certain basic obligations they owe you. An ounce of prevention is worth a pound of cure — it is well worth spending time doing your due diligence to protect your investment. Ask prospective tenants key questions such as: Why do you want to move here? How many people will be living in the property? How long do you expect to stay?

It is always a good idea to ask prospective tenants for references from previous landlords. A tenant who can provide strong references from past rental arrangements demonstrates a track record of reliability and good conduct.

The ideal tenant is someone who will respect your property, honour their legal obligations under the lease, and who is responsible and a good fit for the particular property. Taking the time to assess these qualities carefully will help you make the most of your investment.