renting out my first IP..from experience what are the kind of criterias am i looking at for choosing a suitable tenant….rent of around $330/wk..is low income earners a no-no….
If possible meet the prospective tenants where they live, cruise through their premises noting the pictures of the 28 children, two dogs and condition of the bathroom (ask to use the toliet), this will give you a very good indication of the type of tenants. On the way out stop next to their people mover that has the dog trailer attached.
For your first IP, I would suggest using a property manager. They have much more experience and for the small fee that most charge, are well and truly worth it.
Concentrate on getting the deals and leave the tenants to someone else
Cheers,
Pro-Activehttp://www.invested.com.au Australia’s premier Investor Education site
Hi Bacchu,
Select a good PM and they will do the necessary checks and balances for you.
A good PM will check for references and the tenants data base to see if there is any ‘history’ with the prospective tenant. They should then talk you through their findings and allow you to make a decision based on their research.
As for low income earners in a $330/week property – you need to consider the sustainability of the rental payments as a percentage of their bring home pay. Bear in mind banks like to keep loan repayments at ~30% of gross pay as a safety margin therefore I would prefer to keep rental payments below this line too.
There seems little point in accepting a tenant and then find that they cannot sustain the rental payments over the long haul. This is asking for trouble.
Ultimately it is your decision but…….
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958Originally posted by Pro-Active:For your first IP, I would suggest using a property manager. They have much more experience and for the small fee that most charge, are well and truly worth it.
Has anyone had a property manager find suitable tenants for a standard fee when you intend on manging yourself, is this very uncommon??
still don’t know what i don’t know
Originally posted by Mabbott:Has anyone had a property manager find suitable tenants for a standard fee when you intend on manging yourself, is this very uncommon??
This is common in WA,
Most agents have both a Letting Agreement and a Management Agreement. With a Letting agreement, the agent will source the tenants, do the paperwork, lodge the rental bond etc. Then hand it back to you to manage.
Note though, that there a many Insurance companies that will not allow you to take out Landlord insurance with them, unless the property is managed by a qualified real estate agent.Mal
Getting out of your comfort zone, can help you become comfortable
We currently have an ad in the paper for the house we have just bought and renovated. We have never used an agent to manage our IPs but have many times given local agents the opportunity to find us a tenant as a “casual let”. They take the first week’s rent.
In over 25 years of having had IPs, I have never been very impressed with this arrangement. I don’t bother any more giving local agents the “casual let”. I totally understand that they would let the houses which they will be managing in preference to our “casual let” but the last time I tried it, I did not get one call from any agents with even ONE prospective tenant.
The other thing I have noticed over many years is that the rental quoted by local agents is always lower than we manage to get ourselves.
I know we take an added risk in that we don’t have access to the “black list” of bad tenants, but we use “gut instinct” and it is fairly reliable, with only a couple of minor problems over the years.
My thoughts, Wylie.
One of our property managers is so proactive when soucing new tenants for us that she has their income and expenses and the amount they can afford worked out before even presenting them to us. We then have an easy yes or no as the agent is very thorough in background and previous rental checks too.
Pay the money. It may seem that that is your money evaporating into someone elses pocket which could cover your costs a bit better, but believe me, been there done that with managing ourselves and NEVER AGAIN!!!.
The agent then gets the midnight phone calls and not you. The SANF(sleep at night factor) is so worth it.
DD[sleepyanim]
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!Hi Bacchu
Derek is right. Let an experienced PM handle your first tenant selection, but ask to be kept informed of everything the PM does and why, especially in tenant selection, so you can learn. Let them choose a good tenant for you, but ask to see a copy of every application including the declined ones, and discuss the reasons why with the PM. Read everything. Ask for the PM schedule of inspections, a copy of their inspection reports, copy of the lease, copy of any correspondence with the tenant every month. This will all help you to learn about tenant selection and PM.
Better not to DIY straight away.
good luck
cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
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