Landlords: A guide to finding the ideal rental candidates
Category Home owners tips
Integral to ensuring a return on investment in a rental property is finding and retaining the right tenants. Whether it's a commercial or residential property, South African landlords should rely on the expertise of a rental agent to help them find the perfect tenant.
There are certain qualities landlords should look for in prospective tenants to ensure that the rental property is well-maintained and financially secure.
A stable income is a steady job or other reliable sources of income, means that the prospective tenant is more likely to be able to consistently pay the rent on time. As a general rule of thumb, a prospective tenant's income should be at least three times the monthly rent. This ensures that they will be able to comfortably pay their rent and meet all their other living expenses. A rental agent will also verify the tenant's income to ensure that they have not falsified any information.
A good credit score is a strong indicator of financial responsibility and the tenant's ability to manage debts and payments. A rental agent will do credit score checks on all rental applicants.
A positive rental history, including good references from previous landlords, tells you that an applicant is more likely to be a reliable and responsible tenant.
A history of prompt payments will show you that the tenant consistently pays rent in full and on time. Late or missed rent payments can have a significant knock-on effect on your cash flow and the property's profitability, so it's essential to choose tenants who have an established history of paying rent on time.
Pride of place in their living and/or workspace. When interviewing tenants, try to find out about a bit more about their personality to see whether they are more likely to be the type who will properly maintain the property, following any rules outlined in the lease agreement regarding maintenance and repairs, as well as when, and what issues to report to the landlord.
Good communication from a tenant will help to prevent misunderstandings and ensures that any problems can be quickly and efficiently resolved, so landlords should also be on the lookout for this when meeting prospective tenants.
"The best tenants pay rent on time, take care of the property, and stick to the terms of their lease agreement," says Goslett, "Good tenants also communicate effectively with the landlord and respect both the property and their neighbours. If you find a tenant like this, then it is worth doing what you can to retain them," he adds.
Finding the right tenants to lease your property is just the first step of the journey. It's equally important to foster a long-term, stable rental relationship to reduce the headache of having to find new tenants too often. "Keeping tenants happy is the key to retaining them. Proactively addressing their needs, maintaining the property, keeping communication lines open, and addressing any concerns as they crop up ensures a long-lasting and profitable relationship," says Goslett.
Finding and retaining the right tenants for your rental property is central to a profitable real estate investment.
So what should tenants do to stand out as the best choice for landlords?
Tenants should take the time to ensure that their credit record is in really good shape and will also stand up to scrutiny as far as their history of on-time payment is concerned. No landlord wants to have to repeatedly ask for payment or get it late every month.
"Prospective tenants should also be able to provide good references from any previous landlords and compile all the information and paperwork they may need to complete a rental application before they start house hunting. This includes a list of previous addresses, their bank account details, ID document, employer information, and recent payslips.
"They should also have the funds immediately available to pay a deposit, usually equivalent to a full month's rent, and any water and electricity supply connection fees that are required. If they have to wait for a previous landlord to return a deposit, before they can afford to pay a new landlord, they may well lose out."
In addition, while they should be very clear about their absolute "must haves" in a rental home - and what they really don't want - they should try to be flexible on the rest of their criteria so that they can make a quick decision, when necessary, he says.
Author: Team 7