Property Investors: Why tenants are the key to long-term success

As the investment property market in Perth continues to thrive and vacancy rates remain at record lows of 0.5%, it’s easy to assume that finding quality tenants for your property will be easy.

However, with competition being tough and people resorting to desperate measures, it has actually become harder to identify genuinely reliable and responsible tenants among the sea of applications.

In 2024, the D-Residential team has noticed a surge in lower-quality applications from people looking to rent a house in Perth. This is why it has never been more important to work with an experienced property manager.

How do you select a ‘good’ tenant?

Choosing the right tenants in Perth comes down to more than just accepting the first decent application. Here are some of the steps we take:

• Confirm income: The selection process needs to confirm that the tenant can pay the rent on time, every week, for the long term. While it is impossible to predict what will happen in someone’s life, a good job and a steady employment history are positive indicators that your tenant will be a reliable payer. Our experienced property managers always contact the applicant’s workplace to confirm their employment. We will request payslips to confirm the income stated on the application and may ask for bank statements to confirm savings.
• Check references and identity: Applicants must provide references from previous landlords. Our team will contact these landlords to confirm that the applicants have consistently taken good care of their properties. References from past employers will also be required. It is worthwhile to call these references personally and know the right questions to ask. Additionally, verifying an applicant's identity is essential when they apply to rent a house in Perth. Applicants must provide photo identification (Driver's License and Passport) and secondary ID such as a Medicare card, bank card, and a copy of a utility bill.
• Check the National Tenancy Database: Landlords and property managers have the right to know if an applicant has had a lease terminated in the past or has a black mark against their name. This information is supplied by the National Tenancy Database.
• Character checks: In a competitive rental market, well-presented and prepared applications that provide all the required information are regarded more favourably. Our property managers may also contact the applicant for an interview to get to know them better and see what they are like to communicate with. This is when questions can be asked about pets, how long the tenant intends to stay, how payments will be made etc.

Perth property investors beware

We have noticed in Perth that increased competition means renters with poor credit scores or who are named on the National Tenancy Database are targeting private landlords who self-manage their properties. These individuals hope the landlord isn’t aware of best practices when it comes to selecting a candidate and that they won’t do their due diligence. The result for the landlord can be loss of income because a tenant fails to pay, or damage to their property.

The other thing to be aware of if you manage your own investment property is the long list of regulations around reviewing tenant applications and accepting or rejecting people who are looking to rent a house in Perth.

As shared by Consumer Protection, if someone is listed on the National Tenancy Database, the lessor/agent must provide them with a written notice within seven days, with some specific details about what was discovered. If you are trying to manage an investment property on your own and you’re not aware of this, things may become complicated.

There are rules about discrimination as well. For example, you can’t rule out an applicant based on their gender, religion, family or marital status. A property manager will ensure nobody is rejected based on these factors.

Read more: How to choose the right Perth property manager

The importance of tenant retention

Property investors and tenants both need each other. This is why, once you have found good tenants, it’s important to do the right thing by them.

A vacant house can quickly be rented out in Perth, but it still costs money to advertise the property and select the right applicants. Moreover, the market in Perth will eventually settle. If you have a great relationship with your tenants, they are likely to stay put, even if more options become available.

Tenants who rent a house in Perth move on quickly if:

• Appliances don’t work
• Hot water is an issue
• There are leaks or mould
• They don’t feel safe
• They make reasonable requests that aren’t addressed
• They reach out to their landlord but don’t get a timely response

When you have a proactive property manager, your home will be looked after so the tenant feels secure and comfortable. As a result, they will treat the place like it’s their own, which will help it maintain its value.

Having a good relationship with your tenants is easier when you have a reliable property manager. They act as the neutral go-between and they understand tenancy laws in Western Australia. Your property manager will save you from having to answer phone calls from your tenants and will make sure they feel at home for the long term.

Want to find the best tenants to rent a house in Perth? Contact D Residential today.