How to avoid a tenant from hell

First time property investors are currently becoming very active in the Western Australia housing market. This is because falling interest rates, low rental vacancy rates and rising rents all make it a perfect time to consider buying an investment property.
Many first time property investors believe that once they have purchased their investment property, their hard work is over. In reality, it is only just beginning because one of the biggest challenges in property investment is to properly manage your rental property.
In particular, the selection of a tenant is critical and in this regard is a fundamental step in creating a successful tenancy, closely followed by a thorough induction process to ensure the tenant fully understands their obligations, as well as all the terms and conditions that will affect the tenancy.
This is because a tenant determines the cash flow of the rental property for a landlord and also the amount of money that has to be spent on maintenance. Avoiding “tenants from hell” and selecting reliable tenants is just as important as selecting the location of the rental property.
Many first time investors generally only buy one investment property and then exit the market through poor experience with a tenant after losing a large amount of money either through loss of rent or damage to their rental property.
These first time investors are generally people who have decided to manage their rental properties themselves rather than appointing a property management company to undertake this responsibility. They are people who have fallen into the trap of spending a significant amount of time trying to find an investment property and not placing an equal amount of effort into selecting the right tenant for the property, as well as establishing provisions to protect their investment for the long term.
If you are a first time investor, selecting a tenant means that you are placing a major financial asset in the hands of someone you hardly know.  The task of finding a good tenant for a rental property is challenging because each week in Western Australia there are several thousands of people seeking to lease a rental property – this can be overwhelming for the property owner when attempting to sift through so much information at one point in time.
One of the most common mistakes for people who privately manage their own rental property is to select a tenant based on an initial first impression that may not give a full reflection of the applicant’s full tenancy history and their ability to become great tenants.
Unfortunately, there are many of horror stories where a novice landlord has selected a tenant because the tenant looked presentable only to find out later that they have a poor tenancy history, resulting in the owner suffering both a financial and emotional loss.
If the person has rented before, then the previous landlords should be contacted to determine if the applicant has been a responsible tenant. If the prospective tenant cannot provide this background information or information on where they have lived previously, then you should treat them with caution.
Selecting the right tenant for a rental property should be accompanied by a very thorough process, ensuring you minimise the risk of selecting people who do not pay their rents on time or who fail to take care of the rental properties. This selection process, along with all the other important processes agents put in place to fully maintain the property and the tenancy partnership are the key factors to why most people now select a real estate property management company to select a tenant for their property.
Many first time investors do not understand the value of engaging professional property managers who are trained in selecting good tenants for rental properties and have access to relevant tenancy data bases. These background checks include examining national data bases to determine if the person has a history of not paying their rent or damaging rental properties.
A reputable property management company will also conduct regular property inspections and initiate maintenance programs to ensure that the property is kept in good condition by the tenant and ensure that rent is paid in a timely fashion.