8 steps to finding great tenants: Part 1
Taking the time to find the right tenant for your property will save you hours of unnecessary work down the track.
Blogger: Michael Gilbert, co-founder, Cubbi
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After a couple years as a property manager, I realised something very important.
If I had bad tenants living in a property I would spend three times more hours managing that property than if I had good tenants in that same property. Amazing.
I’ve broken it down so you can see where I’ve spent those extra hours.
Hours spent managing a property with a Bad Tenant:
- Advertise & Inspections - 3 hrs
- Lease & Condition Report - 2 hrs
- Routine Inspections - 4 hrs
- Repairs & Maintenance - 4 hrs
- Rent Collection & Arrears - 8 hrs
- Vacating & Bond - 10 hrs
- Re-advertising & Inspections - 6 hrs
- New Lease & Condition Report - 4 hrs
Total of 41 hours for a year spent managing a property with bad tenants in it.
Now, here are the hours spent managing the same property but with a Good Tenant:
- Advertise & Inspections - 6 hrs
- Lease & Condition Report - 4 hrs
- Routine Inspections - 2 hrs
- Repairs & Maintenance - 1 hr
- Rent Collection & Arrears - 1 hr
Total of 14 hours for the year.
Finding a bad tenant takes less time. No need to put the effort into presenting your property and screening the tenant. But you’ll notice spending this short time now leads to headaches and many extra hours wasted on rent arrears. Then kicking them out and starting the process of finding a new tenant before the year is up.
I have not even factored in the extra cost involved in having bad tenants. Trust me you don’t want me to.
Instead I’ll show you how to find great tenants for your house. Here’s my eight-step guide to finding great tenants.
This is part one of a three-part super blog. Make sure you read each one in the coming weeks to get the essential how-to tips I have created to help you find good tenants like a pro.
1. Who is the right fit for your house?
When you know who the most suitable tenant for your house is, you can start preparing your property and creating an effective advertisement focused to attract those types of people.
The people most suitable are more likely prepared to pay the most amount of money for it.
Be careful not to just base your answer off who you want. Instead, think about who is most suitable.
The answer will have a lot to do with their ability to pay the rent and look after the house. For example, your house might be perfectly suitable as a young party house, but those types of tenants might not be so good with looking after the house.
Keep in mind you can always make a couple of small adjustments or additions to the property in order to attract the right tenants.
Here’s an example:
I have a nice spacious three-bedroom house on flat block within easy walking distance to a local store and golf course in a super quiet area with mostly active retired people living close by.
Therefore, a newly-retired couple would be most suitable for my home and would also likely be prepared to pay the most for it. The only problem is, it’s a warm area and I only have one small air conditioner. Installing a good air conditioning system to cool the house will be the final piece of the puzzle to convince a retired couple to rent my home.
I’ll continue with this example when giving you some great tips to creating a killer marketing plan for your property in part two.
Still not sure who is the right fit? Think about your current or previous tenants. Is there a pattern? What do they like most about your house?
2. Get your house tenant-ready
They say you only get one chance at make a good impression. This rule can be applied when attracting good tenants.
You’ll have to roll up your sleeves and get your hands dirty if you want good tenants fighting over your house.
Get these completed even before the photos are done:
Any small additions to help attract the type of tenant you’re after, e.g., installing an air conditioner.
General maintenance jobs such as unfinished painting or replacing missing light globes.
Clean the house from floor to ceiling and front to back.
Trying to rent a house that is “tenant ready” is soooo much easier.
Take a moment and pretend the shoe is on the other foot. You’re now the tenant walking through someone else’s house up for rent.
You’ve been to two inspections today, one with dirty carpets, dirty kitchen and a filthy mouldy bathroom. Out the back, the grass is long, so long that when you walked over to check out the shed you could feel all the thousands of insects in the grass climbing up your legs. Not a good feeling.
The other house was reasonably clean but only half the lights worked when you tried turning them on. The oven door was wobbly, the smoke detector was hanging off the ceiling attachment and there were dents in the walls, the aftermath of doors being repeatedly slammed against them.
How does this make you feel? Does someone actually care about these properties?
Do you think the owner will fix something if you ask them to? No.
At the end of the inspection, when you question the owner/agent about the filth and unfinished maintenance around the house, they tell you it will all be done before anyone moves in. Yeah, right.
How can you believe them? You’ve been told all this before. You have learnt that what you see at the inspection is what you get when you move in.
The next day, you attend another inspection. “Same old, same old,” you think. Your excitement is pretty low as you drive to the inspection.
When you get there… this one is sparkling clean, the garden is manicured and inside everything works! The house appears “loved”. Finally!
Ok, you can put the shoe back on your original foot.
A good tenant who cares about the home they live in (and will treat the house as their own) will apply for the third property. They may even offer you a higher rent just to stand above all the other applicants.
If that third property was yours, although you spent the extra dollars and time getting the house “tenant ready”, you will likely have several great long-term tenants fighting over your house.
Take your pick.
Check out part two to learn the three crucial steps to creating a killer advertisement to attract the right tenants to your inspections.
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