One of the most important steps for rental property investors is finding reliable tenants. A good tenant pays rent on time, cares for the property, and minimizes the risk of disputes. However, identifying the right tenant requires a careful and professional screening process.
In this article, we’ll outline the best practices for finding and screening tenants in New Zealand, helping you protect your investment while fostering a positive landlord-tenant relationship.
Step 1: Advertising Your Rental Property
Write an Effective Listing
Your property listing is the first impression potential tenants will have of your rental. Include the following:
- Key Features: Number of bedrooms, bathrooms, and any standout amenities (e.g., heat pump, parking).
- Location Highlights: Proximity to schools, public transport, or shopping centers.
- Photos: Use high-quality images to showcase the property’s interior and exterior.
- Rental Terms: Clearly state the rent amount, bond requirement, and whether the tenancy is fixed-term or periodic.
Choose the Right Platforms
Advertise your property on trusted platforms, such as:
- Trade Me Property
- OneRoof
- Local community boards or social media groups
Ensure your ad complies with the Advertising Standards Authority (ASA) guidelines to avoid misleading claims.
Step 2: Set Clear Expectations
Before inviting applications, define your ideal tenant profile:
- Financial Stability: Tenants who can reliably pay rent.
- Lifestyle Fit: Consider factors like family size or pet ownership in relation to your property.
- Compliance with Rules: Tenants who respect body corporate rules (if applicable) and property guidelines.
Avoid discriminatory criteria, such as rejecting tenants based on race, gender, age, or family status. This is prohibited under the Human Rights Act 1993.
Step 3: Reviewing Applications
Ask prospective tenants to complete a thorough application form, which should include:
- Full name and contact information.
- Current employment details and income verification.
- Rental history, including previous landlords’ contact details.
- Consent for credit and reference checks.
Ensure you handle personal information in compliance with the Privacy Act 2020, using it only for the purpose of tenant selection.
Step 4: Conducting Tenant Screening
1. Credit Checks
Assess the tenant’s financial stability by conducting a credit check. Look for:
- A history of paying bills or rent on time.
- Outstanding debts or defaults.
You can use services like Tenancy.co.nz or Centrix to perform credit checks.
2. Reference Checks
Contact previous landlords and employers to verify the tenant’s rental history and character. Questions to ask include:
- Did the tenant pay rent on time?
- Did they maintain the property well?
- Were there any complaints or disputes during their tenancy?
3. Identity Verification
Request a copy of the tenant’s ID (e.g., driver’s license or passport) to confirm their identity and ensure the application is genuine.
Step 5: Meeting Potential Tenants
Arranging a property viewing allows you to meet potential tenants in person and get a sense of their attitude and reliability. During the viewing:
- Answer any questions they have about the property.
- Observe how they interact and whether they show genuine interest.
Keep your interactions professional and avoid making verbal commitments until the screening process is complete.
Step 6: Making the Final Decision
Once you’ve completed the screening process, compare applicants based on:
- Financial capability and rental history.
- Compatibility with your property and its rules.
- Feedback from references.
Choose the applicant who best aligns with your expectations and offers the least risk.
Step 7: Formalizing the Tenancy
Offer the Tenancy in Writing
Once you’ve selected a tenant, provide a written tenancy agreement that complies with the Residential Tenancies Act 1986. The agreement should include:
- Names of both parties.
- Rent amount, bond details, and payment method.
- Start and end dates (for fixed-term tenancies).
- Any special conditions (e.g., pet policies or maintenance responsibilities).
Lodge the Bond
If you collect a bond, lodge it with Tenancy Services within 23 working days. Provide the tenant with a receipt and confirmation of the bond lodgment.
Common Pitfalls to Avoid
- Rushing the Process: Skipping thorough checks can result in unreliable tenants.
- Unclear Communication: Ensure expectations about rent, rules, and responsibilities are clear from the start.
- Discrimination: Avoid any screening criteria that could be considered discriminatory under the Human Rights Act.
Benefits of a Professional Screening Process
By investing time and effort in finding the right tenant, you can:
- Reduce the risk of unpaid rent or property damage.
- Build a positive, long-term landlord-tenant relationship.
- Minimize disputes and maintain a well-managed property.
Finding and screening tenants is one of the most important steps in managing a rental property. By advertising effectively, conducting thorough checks, and following legal guidelines, you can secure reliable tenants who will respect your property and make your investment a success.