Black & Young Burleigh
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Property owners should never underestimate the value in a thorough tenant selection process, as a wrong decision at the start of tenancy could prove very costly with loss of rent and possible damages.
If landlords hold out for above market rents, they may attract a poor quality tenant and this could end in financial disaster – it is like playing Russian roulette with your investment property.
Tenant selection is also a key issue that people who are entering the property investment market should also focus on.
One of the key issues that many people overlook when buying a rental property for the first time is the needs of the tenant – the person who will actually live in the investment property.
Many first time investors buy an investment property which is similar to their own family home without taking into account the particular needs of the rental market.
For example, if the demographic of tenants in your area are generally young families or single people, they may prefer to live near social infrastructure such as schools, shops or public transport.
The tenant is ‘King’ when you are considering buying an investment property because a good tenant will pay their rent on time and help maintain the property.
It is important to remember that many people who rent cannot afford to buy a home so the weekly rent has to be very competitively priced.
Setting the correct rent which will appeal to the largest number of prospective tenants is a therefore an important consideration when you are marketing your investment property. If tenants are finding better value property elsewhere then your property may sit vacant for longer.
The fact is that many first time investors over-price their rental property and as a result lose significant amounts of money in the process.
Accepting a lower rent to attract a great tenant is in most occasions, the financially smart decision to make in these market conditions.
Tips for renting
* Do your research. How much are similar properties being actually rented for in your area? This might be very different from the advertised rental price.
* Unless your property has some special features, don’t pitch your rent at the highest rate. The best tenant is a long term tenant who pays regularly and looks after your property. The best deal is generally a “win win situation” for both property owner and the tenant.
* Don’t set the rent at the rate you need to cover your costs. Always focus on the tenants rather then your own financial needs. You can only sell your product at a price someone else is prepared to pay. If you need more rent for your costs, then seek financial advice on whether the investment is still appropriate for your personal financial situation.
– See more at: http://www.professionals.com.au/2015/03/landlords-need-to-be-wary-when-selecting-tenants-during-times-of-high-vacancy-rates/#sthash.yt0XYLCj.dpuf