When looking for an investment property that you intend to lease, your choice of the tenant for the property is almost as important as the actual choice of property.
What you want is a good tenant that will provide an ongoing income stream. After all, a strong cash flow is the key ingredient to making a sound investment. Furthermore, the wrong tenant could actually cause you to lose money. A tenant that leaves your property in a state of disrepair could leave you liable for expensive maintenance and damage bills which will quickly eat into your cash flows and could very well leave a big crack in your nest egg.
Going the distance
First thing first…you want a tenant who will last. The longer someone stays in your property, the less time and money you’ll spend trying to replace them. With that in mind, you will need to treat good tenants well and deal promptly with problems that arise. You should also only implement a rent increase when the market justifies it and explain in writing why the rent has been increased, with plenty of notice.
Location, location
Condition and location is a huge factor in the type of tenants your property will attract. You should consider the suburb, schools, shops, local amenities and business districts in the area to determine the type of tenant that is likely to be looking for a home in your area. If your property is located in an area that is renowned for its lifestyle options and schools you should attract more applicants and be able to cherry pick the ideal tenant.
Drive it like you own it
Finding a good tenant is about marketing and about due diligence. Make sure that your property is well presented and desirable. Once prospective tenants begin expressing an interest in your property, undertake background checks and screening. A normal tenancy application requires at least three references from an employer, a property manager and a personal referee. You’ll need to ask the past employer about the prospective tenant’s reliability at work, their employment history and financial status.
It sounds like hard work, and it is a lengthy process. But finding a good tenant is important to ensure your investment is safe. If you don’t have the time or the inclination to go down this road and still want to invest in a property, then investing with Defence Housing Australia could be the best option for you.
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Defence Housing Australia tenants
DHA properties offer you “peace of mind” and DHA may well be that “good tenant” that every property homeowner hopes to have. Properties are sold to investors and leased back to supplement their housing supply for the Australian Defence Force. And because DHA is backed by the Australian Government, and their tenants are members of the Australian Defence Force or Defence civilians, you can expect that your property is in good hands. Rent is guaranteed* for the term of the lease (up to 12 years), is accrued daily and paid monthly in advance, and even paid if your property isn’t occupied.
DHA is responsible for organising and covering the cost of non-structural repairs and maintenance work. As a result, your responsibilities are significantly reduced when compared to conventional residential property investments and there are fewer phone calls concerning maintenance and repairs. As an investor, you will know your property is being cared for without the hassle of doing it yourself.
When the lease agreement comes to an end, DHA also ensures that your property is returned in good order, is professionally cleaned, and the grounds and landscaping are in a neat and tidy condition. You can then move in, rent privately, or sell the property as you wish.
In essence, DHA can ensure that you invest in a property that receives the rental income it deserves without the headache of securing long-term good tenants.
Learn more about investing in Defence Housing Australia or enquire online.
The advice contained in this article is for general information only and should not be taken as financial advice. Investment is subject to DHA's lease terms and conditions.*Rent may be subject to abatement in limited circumstances.
While due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.
