Once you've set an appropriate rental rate for the property you've purchased using an investment home loan, it's time to lean back with your hand on the fishing rod. If everything's gone correctly, you should be feeling some tugs on the line pretty soon.
Suddenly, you might find yourself inundated with interest from potential tenants. With so many renters eager for a property in the current market, how do you choose between them? And you thought choosing an investment property was hard!
With a few simple tips, you can forget your worries and start looking into tenants with confidence – and make sure your home loan doesn't go to waste thanks to some neglectful renters.
How friendly should you be?
It can be tempting to choose a friend or even a family member to rent your property out to. After all, wouldn't it be nice to help your friend or your child out in a tough market with some mates' rates?
There are certainly upsides to it. They don't have to compete with other hungry renters, and you have someone who you can trust staying in your property.
But we all know the perils of mixing business and friendship. If things turn sour, your problem tenant is compounded by a falling out with a friend.
Give a personal tour
If you've already invested in a property, then it's likely you're a busy person. When prospective tenants come sniffing around the property, you probably figure you can just give them keys, show them where the front door is and get on with something else.
If so, you're missing out on a good opportunity to check the tenants out for yourself. While you're giving them a tour of the place, what they don't know is they're inadvertently giving you a tour of who they are.
The screening process
Your vetting of the candidates shouldn't stop there. Give them a thorough background check with all the tools at your disposal.
Call up their employer to make sure they're a reliable employee who will be able to pay the rent. Talk to their previous landlord and find out how long they lived in their old property, whether they paid their rent on time and how they left it in the end. And finally, check their references.
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.