Landlords want good quality tenants. It’s as simple as that. People who pay rent on time, get on well with their neighbours, and look after your investment. So how do you sort the tenants who will take care of the property and pay on time, from the ones you’ll be chasing for months through Tenancy Tribunal hearings?

How do you begin to find good quality tenants in the first place?

Do you advertise in the backpage classifieds of your local newspaper, place a listing on TradeMe, or make your own sign and nail it to the fence? How and where you advertise will influence the type of people who inquire about your listing. ‘Budget’ or ‘home made’ looking advertisements can rightly or wrongly influence perceptions of your property. Property managers have extensive advertising networks, websites, and databases of people looking to rent, so they can generally help you find the right people for your investment property fast.

Depending on the market you might struggle to generate interest, or you could be swamped by hundreds of calls, inquires and applications for more information, or requests to visit the property. Sorting through them all can be a daunting prospect to go through alone. Most property managers will have an application form, which they've refined over time, plus the systems and processes in place to handle large numbers of inquiries. They will have people answering calls, processing applications and show potential tenants through the property, which will take a lot of stress off of you. Why try to be in multiple places at once if you don’t have to? All this, and you haven’t even started to screen potential tenants or reap the rewards of owning rental property.

Contacting referees

Your first step is to contact the referees provided on tenant application forms. One should preferably be work-related, and a manager or supervisor rather than a colleague. This should help you learn two things about them:

• Their job performance or work attitude. This provides some insight into how they will treat your property.
• The type of job they have. This provides some insight into whether or not they can afford the rent and all the other expenses that come with renting.

You should also ask for the contact details of their previous landlords -  what better to find out how they might take care of your property? Remember you must have permission to contact referees. 

Background checks

A credit check will tell you if the potential tenants are bankrupt, owe money or have trouble repaying debt. You must have permission to run a credit check, so make sure you include an appropriate disclaimer in your application forms.

Have these tenants caused trouble before? Tenancy Tribunal details are public record, and can tell you if your potential tenants have been prosecuted, had run-ins with Tenancy Services, have a longstanding habit of paying late (or not at all), or have previously been evicted. While you can’t disqualify someone from renting your property on the basis of having a criminal record, multiple convictions for destruction of property, drug dealing or manufacture,  should be warning flags for what could happen to your rental.

All of these checks rely on the potential tenants providing information that’s true and correct. Screening, verifying referees and history must be extra thorough to identify false information. Property management agencies talk to each other and share information relating to bad tenants. They also have access to databases not available to regular people, which allows them to conduct more comprehensive background checks one.

For more best practice tips to help you better manage and protect your investment, download our free guide: