Hi all,
Some interesting points raised in this post that I would like to add to.
BAD TENANTS
Part of negotiating is getting to know personality types. I know and love a few people I wouldn't lease to in a pink fit. It doesn't mean they are bad people, in fact they are lovely, friendly, laid back (about EVERYTHING) people. I've had condescending, abrupt, rude etc tenants in the past who I personally disliked but always went the extra mile for because they fulfilled the landlords' basic goals - rent always on time, property well maintained, excellent return.
Looking for 'bad' traits when leasing to someone is helpful but its not the end of the story. If you are not good at distancing yourself from this (sometimes frankly battering) experience, you should use a property manager. If you are good at this but your time is better used elsewhere then you should use a property manager. If you are good at this and have plenty of time on your hands, self managing would save you money but even better - as many people have pointed out on this forum - we always need good property managers.
LACK OF RENTAL HISTORY
If there is no history listed on applications and no searches on Google or Facebook show up
o - yes I use them) this can be a tough one. Property Managers have access to national tenancy databases - colleagues of mine have had old tenants return a couple of years after the listing begging to pay the outstanding money to have their names removed. Still, a tenant may only be listed on them of they have been REALLY difficult.
Let's face it - if we have plenty of glowing applications, the person without the history will miss out every time. The only time someone without a history gets a property is when there aren't better alternatives so deciding not to rent to someone who has no rental history can have you jumping from the pan into the fire if you have little cashflow.
If the price is right and you are just in a very tough market (little demand), I've found the best way to deal with this is, if the prospective tenants seem fine in every other respect, (i.e. employer references check out etc.) suggest a 3 month lease and explain that it is due to the lack of rental references - that it is essentially a trial period. Then at the end of that 3 month period, if all is good offer another 3 month lease, then at the end of that 3 months offer a 6 month extension on the lease. This has worked for me in the past.
I hate doing 3 month leases personally as they are a lot of work but more than worth it if you are not sure about someone and want to be able to get them out as soon as possible if things go pear shaped. This is a strategy for a given situation - don't use it on everyone as you will scare away good applicants who want stability. Chances are someone who has no rental references is being turned away everywhere else for no reason other than the lack of 'formal' rental references - and it could be an opportunity for both parties - particularly if the property is a problem property i.e. next to housing commission, no airconditioners when all other properties in your market have airconditioners etc.
Sorry if I've bored anyone to death with all that.
Have a good day
Jody