Chris Gray

5 tenant red flags

By Chris Gray

Selecting the right tenant for your investment property can be tough, especially when you want to get someone in there and paying rent straight away – but make sure you look out for these warning signs. 

Blogger: Chris Gray, CEO, Your Empire 

Many people make the mistake of not paying attention to the quality of the tenant – as long as they have rented the property and are achieving a high rent they’re happy. However, this is often cause for concern later down the track when they are forced to spend a large amount of money fixing the damages caused by out-of-control tenants and spending time searching for new tenants when they don’t work out.

I recommend developing a good relationship with local agents and property owners so they’re honest when you ask for a reference for a potential tenant, as many agents will give a good reference to get the tenant off their hands and they then become your problem.

My five warning signs that you should steer clear of a tenant:

1) If they’re quick to find faults. If you have someone attend an inspection of your property where they point out every minor defect they can find despite the unit or house being near perfect, but put in an application anyway – stay clear. You will be constantly sorting out repairs and spending unnecessary money to keep them happy.

2) If they have something to hide. If an applicant applies to rent your property but does not provide any supporting documents or references, there is usually a reason why and you should proceed with caution. When you specifically request this information and they still cannot produce anything, I think it’s safer to simply select another applicant.

3) If they’re always in arrears. Rent should always be paid on time. An applicant who is constantly late with rent or still owing money to their previous landlord will always be this way, and I can guarantee they will be a financial burden to you. One of the most common excuses applicants make for being behind in payments is that their previous agent wasn’t organising repairs on time - even if this excuse may be true, it’s a major red flag.

4) If they’re constantly on the move. If an applicant has moved properties every six months for the past three years and explain they did so for a lifestyle change, you can be fairly confident you will be looking for a new tenant six months down the track if you proceed. It is also likely that they weren’t looking for a lifestyle change but instead were asked to leave their other rental properties.

5) If they’re poorly presented. Just like a job interview, applicants should always make an effort to look well-presented when they inspect a property and meet the owner – this shows they’re taking their application seriously and is a good indication they will respect your property. If an applicant has unruly hair, and is wearing slippers and a dirty shirt, you can be sure that their living habits will be just as chaotic.

Read more: 

4 benefits of refinancing your investment property 

5 ownership structures to consider 

How reliable are property valuations? 

Tips for subdividing your property 

Why you NEED a property manager 

9 golden rules 


About the Blogger

Chris Gray

Chris Gray

Chris Gray is CEO of Your Empire, a buyers agency which builds property portfolios for time-poor people – searching, negotiating, renovating and managing property on their behalf.

Chris’s team buys 1-2 properties a week and often spends $5m+ a year renovating on other behalf, providing a unique insight into market conditions and buyer and seller sentiment. Chris hosts “Your Property Empire’ each Monday on Sky News Business channel, where he interviews various heads of property research companies and major industry figures. Chris is a qualified accountant, buyers’ agent and mortgage broker.

For more information visit www.yourempire.com.au, www.chrisgray.com.au and follow Chris on Twitter: @ChrisGrayEmpire 

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