Any qualified property manager in Auckland or New Zealand will tell you that tenant screening and selection is essential to property management. It’s extremely important that you or your property management company have a good tenant screening process in place so that you can find the best possible renters. This will protect your investment in the long-run, ensure consistent returns, and provide you with trustworthy, long-term tenants.
Why tenant screening is essential
The best tenants are ones who pay their rent on time, keep your property clean and tidy, and are generally nice to interact with. They’ll understand that properties are valuable assets and they’ll respect you and their rented space.
On the other hand, unsuitable tenants are very difficult to deal with. They can repeatedly miss rent payment dates, underpay their weekly rent, foster mistrust, or even damage your property without reporting it. These tenants are a nightmare to work with, so avoiding them with a thorough tenant selection process is vital to protecting your property investment and income.
By carefully screening potential tenants, you can help to ensure your Auckland property is rented out to reliable tenants who will take good care of their living space and protect your asset at the same time. The screening process will help identify the best renters and weed out the worst.
Effective strategies for proper tenant screening
Tenant screening is a complex process and requires a great deal of time, from organising property viewings and meeting prospective tenants to assessing each application, completing background checks, and phoning tenant references. Hiring a professional property management company to handle the process for you can set you up for success from the start, as well as take away a time-consuming task.
Whether you self-manage or hand the keys over to a team of professionals, there are several focus areas for tenant screening and selection. Here are some key tips to get you started:
Use online rental applications. Online application forms are a fantastic option for applicants. Because they’re straightforward, they help potential renters understand exactly what information they need to give you to get the process started.
If you join a property management company, they should have access to the latest technology on the market to process online applications fast and efficiently. Hammond & Co Property Management is an Elite partner of Tenancy.co.nz. This gives us access to eBundle Pro - an online tenancy application and agreement software that offers the best protection for sensitive information as well as full compliance with the law.
If you or your property manager notice any red flags in an initial application form, you are within your right to reject the applicant outright. If you are happy with the information provided, then the next stage of the screening process can proceed.
Run a background check. A thorough background check on an applicant can provide you with information about an individual’s criminal history, credit history and other important details. This can give you valuable insight into what kind of person the individual is and can help you assess whether the tenant is a viable option for your property.
Landlords who opt to self-manage their property often lack the resources to provide comprehensive tenant screening and background checks. If you join a property management company such as Hammond & Co, you can rest assured all potential tenants will be professionally vetted in real time via exclusive property management software.
Ensure you or your property manager meet potential tenants in person. Schedule a face-to-face meeting with any potential tenants. Doing this gives landlords or property managers a chance to get to know an applicant and assess their suitability before agreeing to a tenancy. Where practical, it’s a good idea to require all applicants to view your property in person before they can apply. This saves time by allowing you to meet each prospective tenant before reaching the application stage. It also ensures they are 100% certain that your property will meet their requirements long-term. Tenants who have not seen a property in its entirety before beginning a tenancy are at risk of an early departure if it isn’t what they expect.
When meeting interested renters, pay attention to their appearance, demeanour and communication skills. If they’re a well-mannered person who is respectful, then there’s a good chance they’ll be a pleasure to interact with. If they’re rude and dismissive, they may not be a good fit, even if their application was great on paper.
Understand what you can and cannot ask. The tenant screening process involves you or your property manager collecting information about potential tenants to assess whether or not they’re right for your property. While you are allowed to collect personal information, there are certain details that you cannot ask about because they don’t affect the suitability of a tenant.
Declining an application due to irrelevant personal details is considered discrimination. You need to understand what you can and cannot ask before interviewing a candidate and asking them any personal questions.
It is against the law to discriminate against a renter based on the following criteria:
- Their gender identity
- Ethical and religious beliefs
- Their ehtnicity, naitonality, or the colour of their skin,
- Mental illness or disability, or physical disabilities
- Their age
- Political opinions
- Emplyment status (e.g. if they are unemployed or on a benefit)
- Marital status and family status
- Sexual orientation
Landlords or property managers can ask about a prospect’s ability to pay rent, but we would recommend caution in doing so. While you should determine whether or not a renter will be able to afford the rent of your property, requests for employment history, bank statements, or payslips are seen as a violation of the privacy act and discrimination. Applicants are not required to divulge their pay or salary and you should not ask. With that said, they may wish to supply this information as proof of their ability to pay rent. Oftentimes, you will find renters who are serious about a property will willingly offer employment information to show they are a suitable tenant.
As part of the application process, you can encourage applicants to submit supporting documents, such as proof of employment, or ask for a work reference, but you should only collect the necessary amount of information needed to determine a candidate’s suitability for a tenancy.
We would suggest asking each renter what type of tenancy they prefer, how long they plan on staying, and whether or not they have been involved in any prior tenancy disputes. You or your property manager should apply the same screening criteria to all applicants. This will help to ensure that fair and impartial decisions are being made.
When conducting interviews, be mindful of your words when you are discussing possible tenancies. Even when a tenancy agreement has not been signed, there are situations where a renter can contest verbal agreements stating they can rent a property. Binding situations could include:
- Verbally informing a prospective tenant they can rent your property.
- If a prospective tenant confirms they will rent your property when you make a verbal offer.
- If a prospective tenant has paid money for rent or bond towards your property.
Tenant reference checks. You should ask all potential tenants applying for a new tenancy to provide at least two references as part of the tenant screening and selection process. Referees could include their employer or coworkers, previous landlords or head tenants, friends, or anyone else who knows them well and can provide a character and employment reference. Be sure to ask applicants to inform their referees if you plan on contacting them so they are not caught off guard.
As well as talking to potential tenants in person to gauge their character, this will reassert whether or not they are in fact suitable for your property.
Be clear about your expectations. When screening applicants, be clear about what your expectations are for rent payments, cleanliness and other tenancy matters such as routine inspections, pets, or other tenants moving in. This will help to avoid potential issues down the track if your tenancy expectations are not being met. If a potential tenant has any issues upfront, they can look for accommodation somewhere else and avoid wasting both their time and your time.
If you join a property management company, make sure you tell your property manager what your personal expectations are so they understand what you’re looking for and find the right match to meet your needs.
Screen tenants early. You should start the screening process early. You or your property manager should analyse applications as soon as they come in to avoid wasting time on tenants who are not a good fit, or losing ones who are for taking too long. Being efficient is also good for applicants as they can look at other options in the event their application is rejected. In the long-run, this all contributes to your reputation and whether or not you are a good landlord or property management company to deal with.
Hammond & Co Property Management can find you trustworthy, long-term tenants
At Hammond & Co, we know that tenant screening is extremely important and we make sure to follow a rigorous vetting process to find the most suitable tenants.
To apply for any of the properties we manage, aside from special circumstances, all prospective tenants must attend an in-person viewing where they will meet the property manager overseeing the tenant selection process. This also allows renters to view the entire property before deciding whether or not it will be a good fit for their needs. For any potential tenants we think are a good match for your property, we will personally send them an application link to proceed with the next stage of our tenant screening and selection process. Individuals can then fill out our online form to get started with their application.
Once an application form is submitted, we conduct a background, credit and reference check to assess a candidate's suitability. If an applicant is successful, we organise a residential tenancy agreement on your behalf, process bond, and set up rent payments.
Our tenant screening and selection services are available as part of both our casual and full-time property management agreements. Casual services are perfect for property owners who wish to self-manage their property long-term, but may not otherwise have the time needed to organise a new tenancy and implement a thorough tenant screening process.
If you have any questions about our tenant screening and selection, or if you’d like to know more about our casual or full-time property management services, you can call our team on 0508 426 326. You can also get in touch via our contact page.
Hammond & Co: Finding the best people for your properties.