How to secure the best tenant

Securing the best tenant for your client (landlord)

There is no doubt that your landlord will want you to find a tenant for their property as quickly as possible. Afterall, the longer it's vacant the more it costs your landlord as there is no rental income for them whilst its vacant. The juggle you need to do as the Agent is balance your clients expectations on vacancy time with finding the right tenant, not the first one!

Often agents will try and rent the property as quickly as possible but lose sight on the more important task of selecting the best possible tenant. Sometimes, depending on market conditions, this may mean the property is vacant and on the market a little longer than simply putting the first applicants into the property.,

There are 2 key things that any applicant should prove they are able to do when it comes to completing their application and presenting themselves to the landlord. They are:

1. Can they afford the property? and;
2. Can they care for the property?

There is no right or wrong way of selecting a tenant with a landlord as there is no legislation that dictates exactly how a Tenancy Application should look or what questions you should ask. However there are laws that may impact how you format your Forms and select tenants. 

Be mindful of things like:

• Privacy Act
• Anti Discrimination Act
• Any relevant tenancy law that may impact how you collect rent, bond etc from the applicant once approved

Tenant Selection Criteria

Each agent / agency should establish a Tenancy Selection Criteria to be able to determine whether or not an applicant is suitable to put forward to a property owner. A selection criteria should be formulated to be fair, reasonable and ensure that you are able to prove to the best of your ability that an applicant would be suitable for a landlord to accept.

Consider things like:

• What is the household net income verse the amount of rent per week / fortnight / month? Typically a rule of thumb has been adopted in our industry that the combined household income should be roughly 3 times the rental amount
• Does the applicant have consistent income to continue to pay rent (full time or regular income or just casual and fluctuating hours etc.)?
• What evidence has the applicant provided to show they can care for the property (rental references etc.)?
• What evidence has the applicant provided to show they are tenants who do not fall behind in their rental payments (how good does their rental ledger look?)
• How many people are wanting to live at the property and is the property suitable for the number of people? Bear in mind that some Local Councils may have restrictions on who and how many people can live in different types of property.
• As part of the application process, do you need to seek Strata / Body Corp approval for the applicant's pets?

Creating an open relationship with your landlord about your selection criteria will ensure they understand why you are recommending (or not recommending) a certain applicant to be put forward and considered by them.

Accepting or Rejecting a Tenancy Application

Whilst a landlord typically doesn't have to provide a reason if they reject / decline an application, it is important that the application has been declined for a reason that can be substantiated and meets your Tenancy Selection Criteria. This way, if the applicant was to ever challenge this decision you as the Agent would be able to provide why you declined the application as per the owners instructions.

An application should NEVER be declined on an aspect that could be perceived as being discriminatory (age, race, cultural background etc.).

Where possible you should always leave the decision to approve or decline an application up to the property owner. In the event they are happy to work on your recommendation ensure that you have provided them with enough information on email about the application and why you are accepting them. 

REMEMBER: You can only prove how an applicant is at the time they apply and you review the application. You cannot predict what may or may not happen in the future. Even the best of applicants could end up facing an issue whilst renting the property that could impact their ability to pay rent or care for the property.

Once you have an approved applicant

When you approve an application it is important for the applicants to know what is required of them to secure the property. Typically, to secure the property they would be expected to pay their bond in full and at least their first two weeks rent. Some state legislation may outline what you can and cannot accept by way of how much rent in advance an applicant/tenant can pay upfront. Refer to your State tenancy authority for more information about this.

A good mindset is to not remove the property from any of your advertising until you receive the payment of rent and bond. Make sure you tell the applicant you will continue to advertise the property until you receive the rent and bond in your Trust Account.

Part of the Head Office Rental Support Service?

If you utilise the Head Office Rental Team to help look after your properties it is vital that you provide your tenant with their unique reference number before they make any payments in to the Trust. Without this reference number being used their funds cannot be allocated against their new tenancy.

For more information on finding a unique Tenant Reference please click here: https://www.atrealtysupport.com.au/a/solutions/articles/14000145965

Setting up the Tenancy in the @realty CRM

Refer to the Freshdesk article on how best to set up your new tenancy by clicking here: https://www.atrealtysupport.com.au/a/solutions/articles/14000152474