How to select the best tenants
RE/MAX shares tips on how landlords can choose the best tenants.
Integral to ensuring a return on investment in a rental property is finding and retaining the right tenants. Whether it is a commercial or residential property, SA landlords should rely on the expertise of a rental agent to help them find the perfect tenant.
There are certain qualities landlords should look for in prospective tenants to ensure the rental property is well-maintained and financially secure.
RE/MAX of Southern Africa shared some of the tenant characteristics to look for:
• A stable income, such as a steady job or other reliable sources of income, means the prospective tenant is more likely to consistently and punctually pay rent.
Generally, a prospective tenant’s income should be at least three times the monthly rent. That ensures they can comfortably pay the rental and meet their other living expenses. A rental agent will verify the tenant’s income to ensure they have not falsified information.
• A good credit score indicates financial responsibility and the tenant’s ability to manage debts and payments. A rental agent will do credit score checks on all rental applicants.
• A positive rental history, including good references from previous landlords, indicates an applicant is more likely to be a reliable, responsible tenant.
• A history of prompt payments indicates the tenant consistently pays rent in full and on time. Late or missed rental payments can significantly affect your cash flow and the property’s profitability, so choose tenants with an established history of paying rent on time.
• Pride of place in their living and/or workspace. When interviewing tenants, try to find out more about their personality to see if they are more likely to maintain the property adequately, follow the rules in the lease agreement regarding maintenance and repairs, and report issues to the landlord.
• Good communication from a tenant helps prevent misunderstandings and ensures problems get resolved quickly and efficiently, so landlords should also look for this when meeting prospective tenants.
“The best tenants pay rent on time, take care of the property, and stick to the terms of their lease agreement,” said Adrian Goslett, the regional director and CEO of RE/MAX of Southern Africa.
“Good tenants communicate effectively with the landlord and respect the property and their neighbours. If you find a tenant like this, it is worth doing what you can to retain them,” he added.
Finding the right tenants to lease your property is just the first step. It is equally important to foster a long-term, stable rental relationship to reduce the headache of finding new tenants too often.
“Keeping tenants happy is the key to retaining them. Proactively addressing their needs, maintaining the property, keeping communication lines open, and addressing concerns as they crop up ensures a long-lasting and profitable relationship,” said Goslett.
“Finding and retaining the right tenants for your rental property is central to a profitable real estate investment. Speak to your local RE/MAX office to help you find and retain good tenants to achieve long-term stability and profitability from your rental properties,” Goslett concluded.
