Racing to rent your property? Make haste slowly!
Across inner-Brisbane’s rental market tenants currently have the upper hand, and properties that aren’t priced competitively can stay vacant for weeks. Demand is very strong – we’ve had 1,425 new tenant enquiries into the Bees Nees leasing team in the last 30 days alone. But supply is larger and, fearful of vacancy, some landlords and their agents are racing to accept tenancy applications without doing the usual background checks. For better or worse, we’re witnessing agents ticking off an approval in less than 15 minutes. Tenant says “I’ll take it”, agent says “You’ll do”, lease is signed, property’s rented. Done. A roll of the dice.
There’s a lot of reasons we do the thorough checks and ‘homework’ before we recommend a tenancy application to our landlord clients. First and foremost the average investment property in this area has a value of half a million dollars. Would you give the keys of your Lamborghini to a stranger?! The 100 points of identification is a must. Then confirming details of their employment is about ensuring they can pay the rent (usually we’re looking for the rent to be no more than 30% of their take home pay). There’s always exceptions, people with assets but low incomes, parents helping with rent etc. A tenant that can’t comfortably pay their rent is in a lose-lose situation with the landlord. Tenants can need protecting from taking on a home they can’t afford (sometimes they forget the scale of the dollars – $500/week is $26,000pa of after tax income). And Queensland’s tenancy legislation provides landlords a very slow and very cumbersome process for chasing arrears and taking back possession.
Rental history is not a guarantee of future behaviour, but it’s pretty close! We want to see references from their last property managers, copies of payment ledgers and we check every prospective tenant against a national default database. How often have they moved and why? If their past agents issued them with remedy notices we don’t necessarily reject an application, but we’ll need good info on what happened. Was there a reason for the damage? Those of you with landlord insurance might like to check your policies too, as knowingly taking on a tenant with a poor track record might impact any future claim.
Most landlords know the value of a good working relationship with their tenants. It’s like a small business, the tenants are the customers, and when the customers have more to choose from we need to provide even greater service and accommodate their needs as much as possible. And the vast majority of tenancies are amicable throughout, the rent is paid, the property maintained, and all ends without dispute. But some tenants can and do lie to secure a home and you can read one example when we had faked employment and rental documents submitted to us!
We have team members standing by and ready to work flat out when we receive an application for our clients’ properties. We do our checks as quickly as we can and we keep the tenants updated as we progress. But an investment property is a hugely valuable asset and it needs protecting. We know the headaches we’re avoiding for our landlords by taking a cautious approach.
If your investment property is vacant and our Brisbane property management team can help, please call us on 07 3214 6888.