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Finding good tenants for your rental property is one of the most important steps of the property investing journey. There are no two ways about it: a bad tenant can mean frequent rental arrears, damage to your property, and sudden vacancies (either by them leaving or you having to evict the tenant).
That's why spending the time and effort to find good tenants is an absolute must.
Sadly, finding good tenants is something many owners in Australia struggle with. In fact, 40% of property owners we surveyed said 'finding the right tenant' was a big worry for them. After all, not all tenants can be the cream of the crop.
“Doing a good job of getting good tenants is one of the most important parts of the investment process other than picking a great property manager.”
That being said, there are plenty of amazing tenants out there who are responsible and reliable.
So, how do you find the best tenants for your rental house? What's the best place to find tenants and how do you attract good tenants?
We've put together 7 tips for you to help you on the hunt for good tenants. It isn't as difficult as it seems, and with a bit of practice, you'll greatly increase your chances of scoring a superstar tenant every time.
1. Advertise your rental property on the best places to find good tenants
Realestate.com.au and Domain.com.au are the two undisputed kings as the best places to find tenants. Domain receives about 12 million visits per month and Realestate.com.au a whopping 26 million visits per month. They also do background checks and profile verifications, which means the quality of rental applications across the board is much higher.
Unfortunately, only licensed real estate agents are allowed to advertise their listings there, so you'll have to pay for a leasing manager if you want your property to be listed on either website. This is a big part of why using a property manager to find tenants is so attractive for owners.
The alternative then, as a self-managed owner, is to advertise your rental on sites like Gumtree, Flatmates, Facebook Marketplace and Rent.com.au.
We can easily recommend Rent.com.au as the best place to find tenants for self-managed DIY investment property owners. It has a lot of the same verification tools as Domain and Realestate.com.au but allows non-agents to list their rental on the site.
We would stay clear of Facebook and Gumtree which are notorious for attracting low-quality applicants. Flatmates.com.au can be good for some extra exposure if your rental needs it, but applicants will be of slightly less quality than from Rent.com.au.
Attract the best tenants to your rental property with :Different
Your property will be front and centre with professional photography and top spots on both Domain and realestate.com.au.
2. Price your rental property competitively
True or false?
“Maximising your investment property returns includes charging the highest rent you can get.”
Very false! It’s a common property investing mistake you should avoid, and many rookies get this wrong.
It’s about striking the balance between getting enough applicants and getting the rental yield you want from your property. That’s what’s meant by pricing your rental competitively.
Reducing your rent by $30 to get applicants will always be better for you than extended vacancies.
If you’re curious about where to start, you can get a free rental appraisal online from us at :Different. You should also do competitive research and see what else is out there in your area, and what the price range is.
Once your property is on the market, you’ll need to monitor the interest you’re getting closely and consider reducing your rent if necessary.
We’ve put together a guide for you on when to reduce the rent which we suggest reading if you want to learn more.
Get a free rental appraisal
Learn more about how :Different can help you navigate through the complexity with our obligation-free rental appraisal report.
3. Make sure your property stands out in the market
Once you have figured out where to advertise your property (and for how much), without a shadow of a doubt, you’ll need to make sure your property stands out in the market.
We aren’t saying to go over the top and exaggerate how amazing and one-of-a-kind your property is, instead try to understand what tenants really want in a rental and work around that.
- Get professional photography (first impressions are important!)
- Make the most of the property description. Include keywords like "dishwasher", "air conditioning", "bath", "pool" and so on. Highlight amenities inside and outside the property. Sell the location and nearby sites and utilities. Include a floor plan in the listing.
- Invest in renovations that tenants actually want
- Conduct preventative maintenance
- Keep it clean and tidy
Looking after your property is a two-way street. If you want your tenants to do it, you’ll have to do it as well.
We recommend you read our guide on making your rental property stand out in a competitive market to attract more tenants to your investment property.
4. Understand your target demographic
In order to determine how to find good tenants for your rental house, you first need to understand who you're actually trying to attract! The clue to this is almost always in the property itself.
This means you also need to understand when open homes are most suitable depending on whether they are students, professionals, or a working family.
By honing in on a niche market, your demographic will feel valued and supported by your sharpened focus on their needs and wants. You can then build your listing around your audience with their needs in mind.
For example, if you have a spare room in a flat that isn’t quite big enough to be a bedroom (and you’re targeting couples/professionals), it would be better suited as an ‘office space’ rather than a ‘nursery room’.
When it comes to advertising your rental property, if you try to be everything for everyone, you end up being nothing for anyone. You need to focus on a target market and cater your rental advertisement to those tenants.
Similarly, if your property is a family home that has good schools nearby, you’ll adjust your marketing to target families rather than students or professionals.
This is a crucial factor to consider when it comes to marketing your property and finding great tenants, as you don’t want to risk advertising too generically and end up missing your target market altogether.
5. Do a full background check on tenants
Background checks and reference checks are key to dodging tenants who might blow up in your face in the future. By that we don't mean finding out where they grew up and what their favourite colour is! Rather, you should investigate:
- Their rental history. Speak to previous landlords to get a better understanding of the prospective tenant and how they behaved in the past.
- Their employment history. Many rental applications include a CV. If the tenant has had stable employment over several years, then that's a great sign.
- Credit reports
- Criminal history
- Visa status (if applicable)
It may seem a bit long-winded, but a thorough reference check gives you a massive insight into who these prospective tenants are and whether or not they are reliable enough to pay rent on time and treat your property well.
Background checks are important for understanding tenant applicants, but you shouldn't use them alone to determine whether to decline an application. People can make mistakes and change for the better. Background checks should supplement an interview, and you shouldn't be afraid to raise any concerns you have about their history and have an honest conversation on how you feel about these concerns.
A great way to authenticate a person’s background is through the National Tenancy Database and by doing comprehensive checks, you will be able to see things like if they have ever filed for bankruptcy or their criminal background.
If such things happen to flag up - it is completely up to you on whether you accept them as tenants, but it is important to know their full background before placing your property in their hands.
If you use a property manager for leasing, they also have access to better background check tools and tenancy databases that can provide more in-depth information about prospective tenants.
6. Trust your instinct
You may receive that one application that looks great on paper but for some reason, your gut is telling you that something is off: there’s probably a reason for that.
Do they have a grey area in their employment or rental history? Did they state they’re a non-smoker on their application but smell like smoke at the property viewing?
Don’t be afraid to ask questions either, for example:
- Why do they want to move?
- How long did they live in their previous property?
- What attracted them to the property?
If a prospective tenant is showing huge interest in your property, but you have doubts for whatever reason, don’t be afraid to say no. The most important thing is to trust your gut, as sometimes your instincts are the best judge of character.
7. Invest in a good property manager
If you’ve been asking yourself how to attract tenants, better yet, how to attract good tenants, investing in a good property manager can be invaluable. Property managers are perfect for when you want to find tenants for your rental properties, ensure thorough background checks are done, and can even provide transparent and hassle-free property maintenance for your property.
By sharing their knowledge and skills, it can give you a perfectly tailored experience in how to get the most bang for your buck (and find those dream tenants).
Not to mention, it takes your mind and time away from the investment property, so you can spend your time on the things you'd rather be doing.
As a landlord, you are inherently going to want the best tenants for your property to help look after your investment. While it may be tempting to rent quickly, your goal should always be to find the best tenant for your property, not just the first. Besides, once you have got the ball rolling, finding great tenants will be second nature to you.
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Disclaimer: The views, information, or opinions expressed in this blog post are for general information purposes only and should not be relied upon. We have not taken into account specific situations, facts or circumstances, and no part of this blog post constitutes personal financial, legal, or tax advice to you.