Everybody knows how to check a tenant’s references. Don’t they? After all, secure tenancy forms the foundation of successful investment.
”In fact, it’s often a case of a little knowledge is a dangerous thing,” Monika Bonet, Principal of Raine & Horne Glenelg said. “Many people don’t know which questions to ask and how to analyse the information they end up with. Investors need to feel confident their property manager is experienced – after all maximising investment income is entirely dependent upon keeping arrears, vacancies and repairs and maintenance to a minimum and yield and capital appreciation at a maximum.”
Ms. Bonet said that two most important background checks are previous rental history and employment record.
“This sounds straightforward but there are many traps for the inexperienced – it comes down to knowing what the information means in terms of tenant performance,” Ms. Bonet said. “For example tenants might pay their rent up to date upon vacating but might have been a problem during the tenancy. Or someone might be in full time employment for many years and still not be a good tenant. One or two factors are insufficient to build up a profile of the prospective tenant. But too much information might see someone turning away potentially good tenants and ending up with a longer vacancy. Landlords managing for themselves often get too involved to be impartial.”
According to Ms. Bonet the mistake most inexperienced people make is to rely on personal references.
”In all my years of managing property I have never seen a bad personal reference,” Ms. Bonet said. “Friends and relatives just don’t write negative things about those close to them and even if they do prospective tenants are not going to offer bad references to landlords or agents.”
This blog post is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts.