Planning for Your Future Tenants
Just like buying your first house, investing in property for the first time really can be a voyage into the unknown.
No matter how much careful preparation you put into the financing, selection and presentation of your rental property, there is still that element of risk that comes with all investments.
And the biggest unknown of all is the identity of your future tenants. What will they be like? How reliable will they be? Will they give you grief or instead be the low maintenance dream renters that all landlords hope for?
Reliable tenants make every landlord's life easier, and many agree that good renters in a bad area are better than bad renters in a good one.
It's not just about location after all!
First time investors are liable to ask what seems the most pressing question, then: How can we ensure we get good tenants?
As a landlord you have the opportunity to set certain rules that future tenants have to abide by.
These won't guarantee a hitch-free tenancy – there will always be challenges along the way – but they can at least ensure that certain things are off limits.
When making your mind up about which things should be permissible and which not, it is a good idea to consider how each may affect your property's attractiveness in the eyes of tenants.
Things like allowing smokers, permitting renters to alter the interior paint scheme or being pet-friendly could result in more tenancy applications, giving you a bigger range of potential renters to choose from, as well as even enabling you to raise your rental price compared to similar properties with more-restrictive policies.
In each case, you'll need to measure the benefits against drawbacks, and maybe even move beyond black and white solutions and find suitable shades of grey that can give you the best of both worlds.
Set your own parameters – the pets example
Many landlords choose to have a pet-friendly tenancy policy because this opens their property up to a broader pool of tenants.
Such a policy can also reduce tenant turnover, as not all properties allow pets, and also because having pets around can make a place feel more homely.
At the same time, however, it is natural to be concerned about the potential for property damage when there is a dog or cat around.
One way of avoiding this possible outcome is simply not to permit your tenants to have pets; another way is to have specific rules in place governing how they look after them, and their property.
You could specify that pets remain outside, that any damage caused by them is to be fixed and paid for by tenants, or that only certain types of pets are allowed – cats instead of dogs, or goldfish rather than ponies; the choice is yours.
Investing in rental property can entail a lot of work for those who choose to take care of landlord duties all on their own.
Some tenants will be low maintenance while others will require more intervention and contact – and more time invested – by the landlord.
Property owners have another choice, however, and that is to hire a professional to act as an intermediary with tenants.
Property managers assume this role, saving owners time and effort. This includes the task of advertising your property and screening potential tenants based on your criteria.
Once you've got tenants on board, your property manager can then handle the week-to-week management of all of their affairs, including deposits and bonds, rental payments, property maintenance and all general liaison on your behalf.