Choosing the best tenant is one of the most crucial choices made in relation to your investment property. It makes sense that you don’t let such an important decision lie solely on gut instinct, but a procedure of screening tenants that is strategic in uncovering not just surface information, but much deeper beneath the surface of the application form.
100 points of ID is commonly used in conjunction with an application form, however determining the best documents to use is highly important. When choosing which documents would best support an application, think carefully about the point value that you would give to each, to ensure you receive as much information as possible to make the most informed decision.
Some documents of lower point value:
These documents not only show that they are who they claim to be, but also confirm their current and possibly their previous address, so that you can then ensure you are contacting the relevant property owner or agent for a reference.
Happy Landlord, Happy Agent – that’s only part of the story. Should tenants only hear from us when they do the wrong thing? Late rent, inspections not up to scratch, gardens overgrown!! Of course there is contact when we need to arrange maintenance or appointments. And working together with the tenant is a beneficial outcome for all involved. Its recognising the little things and rewarding tenants that can make a valuable tenant a ‘Happy’ one. Incentives go a long way … so put the effort in to retaining them!
A few ideas…
• ‘Certificate of Encouragement‘ for a tenant who consistently pays on time
• Kids certificate for a tidy room at an inspection– parents do the cleanup but both will get a kick out of it.
• Reduce their water bill for maintaining gardens to a high standard.
• Small renovations such as updating the property with new carpets, fresh paint or a new appliance, eg dishwasher.
• Small gift during the year or for an occasion such as Christmas, birthday or birth of a child.
Reward and recognize good tenants and discourage their urge to move!
A property lease is essentially a legal and binding agreement between a tenant and landlord. As part of the contract, the tenant agrees to rent the landlord’s property for a fixed term, usually six or twelve months. If the tenant subsequently wants to terminate the lease before one fixed term has expired, there are potential costs to be considered.
In most cases, the tenant is liable to pay rent until suitable replacement tenants can be found, as well as a percentage of the landlord’s re-letting costs. As an example of calculating the re-letting costs, if the tenant were to break the lease halfway through the fixed term period, they would pay 50% of any re-letting fee payable to the agent (usually equal to one week rent) as well as 50% of any marketing costs.
By law, the landlord or their agent has to do everything they can to try to find a new tenant as soon as possible while minimizing the vacating tenant’s costs. If the landlord does anything to make it harder to find a replacement tenant, like increasing the rent or unreasonably rejecting potential tenants, the vacating tenant may not have to pay the full amount requested. If there is a dispute over the amount charged, it will usually be adjudicated at the Consumer, Tenancy and Trader Tribunal.
There are only a few ways a lease can be broken without financial penalty to the tenant. The most common is if the landlord fails to keep to the terms of the lease, like not performing essential maintenance or repairs. If the breach is serious, the tenant can give 14 days’ notice or apply to the tribunal. If the landlord disagrees with the branch, they can take the tenant to the tribunal.
The tenant can also give 14 days’ notice if the landlord puts the property up for sale during the fixed term tenancy and the tenant was not told before originally signing the lease.
Of course, if the tenant and landlord mutually agree, the lease can be broken without penalty to either party. Ideally, it’s best for the tenant to give as much notice as possible if breaking their lease, to allow for the best chance of finding a new tenant quickly and minimising either party’s loss.