How to attract the best tenants for your investment
Property management fee getting too high? Or maybe you haven’t a clue what your property manager does aside from sending you a quarterly property inspection report. Whatever the reason for you have deciding to go DIY property management, read on and discover how to be a success.
Securing the right tenant for your investment property is as important as finding the best housing assets to invest in – to thrive in the property investment scene, pairing an attractive home with a competitive and credible tenant will do wonders to help you achieve your investment goals.
There are five aspects of screening prospective tenants that every landlord should go through before agreeing to rent out a property.
Getting to know your potential tenants
The most important thing to do first is to get a clear understanding of the type of tenant you are hoping to do business with. Is your rental property targeted to small families? Maybe you are catering towards students? Or perhaps you're focused on leasing to young professionals.
Make a list of your perfect tenant's characteristics, and be sure to consider the source of income. Do they have stable employment? What are their means to pay the rent?
It will also be beneficial for you to personally screen and interview potential tenants. Talking to them will help you get a sense of how they interact with others, as well as insights into their attitude and personality.
You can do a simple background check using social media, or you can ask them for character and professional references (there's nothing to stop you from doing both, of course). There is also the option to verify their names with a tenancy database to make sure there are no red flags.
Dressing (the property) to impress
To gain the attention of high-quality tenants, you must make sure the property is in its best shape.
Spend an ample amount of time inspecting your property. Take a look at the kitchen cupboards and make sure the cabinet doors are in crisp condition. If your budget permits, you can also invest in new appliances.
The kitchen is one of the most frequented rooms in the house, so it makes sense to ensure that everything inside is functional and visually in good shape.
It is also important to pay the bathroom a visit to see if there is a problem with the pipework. Does the room need new tiles? Is it practical to invest in a new toilet seat? How about attaching new vanity mirrors?
Additionally, you can check the lighting of every room and consider replacing the bulbs with new energy efficient ones: they will be cheaper for your renters and brighten the interior of your house. A new paint job or fresh wallpaper can also give an instant makeover – just make sure to select muted and neutral colours, as these will suit most tenants.
Showing off the property's best assets
Another way to get people to talk about your property is to use several platforms to reach potential tenants. Listing sites, online ads, and social media sites are some of the avenues you can use to market your property, but only if you utilise them effectively. The key: be as creative as you can.
The general rule in advertising your property is that you cannot offer what you do not have. In this case, you should never make false promises and claims about the property. Beyond just being misleading, this can lead to fines or even earn you a trip to jail.
Be as genuine as you can in making your advertisement, and you will go a long way toward earning the trust of your likely tenants.
Do not forget to include striking photos in your advertisements. It pays to learn how to effectively take photos – even if all you have is a mobile phone – to achieve decent yet vibrant-looking photos.
Put yourself in the shoes of the potential tenant: What will make you the most satisfied with the property you are advertising? What are the most important things you are looking for?
If the property is geared towards families with school-aged children, it would be better to highlight the house's proximity to schools, playgrounds, and other essential areas of interest relevant to these children.
If the target market are young professionals, put the spotlight on the spacious rooms which can offer ample opportunity for privacy and relaxation after a day's work. In other words, you'll want to tailor-fit to your ideal audience.
Hitting the right price
When deciding on the price tag to put on your property, carefully examine rates of similar houses in the area. While you want your rental rates to be competitive in order to maximise your return, you don't want to overcharge, as this could result in tenants coming and going because of costs.
If you find your ideal tenant, it may be worth approaching them with the opportunity to negotiate on the price to see if you can find a win-win situation.
Leaving your doors open
When putting your property up for viewing, it is important to consider that some (if not all) of your preferred tenants are working a regular 9-5 job. You should be prepared to take inquiries and viewing request out of regular business hours and even on weekends.
When looking for the right tenant, it's important not to be rigid with your process. This kind of arrangement is a two-way street, and you should be someone tenants could easily reach out to in the event of emergencies about the property.
At the end of the day, you want someone you can trust to take care of the property and keep it in great shape for their entire tenancy. If you establish yourself as a credible and effective landlord, you do not need to spend much effort to attract potential tenants for your future property investments.
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This article via Your Mortgage does not constitute advice; readers should seek independent and personalised counsel from a trusted adviser that specialises in property, a tax accountant and property design specialist.