You want tenants who’ll care for your property and fulfil all their obligations. Before you sign a tenancy agreement you can gather information about potential tenants, to help you make your decision.
The more you know about them, the more certain you can be that you’ve made a good choice. If you don’t like what you find out, you can look for a different tenant. You don’t have to tell a potential tenant why you’re not going to rent the property to them, but they may appreciate any feedback you can provide.
You can’t decide who to rent to or whether to continue a tenancy, if your reasons breach the Human Rights Act. For example, you can’t turn down a potential tenant because of their ethnicity.
A casual chat with a potential tenant may give you a feel for how suitable they are. While this is important, you should be methodical when selecting tenants. Your landlord insurance policy may need you to show how you selected your tenants when you make a claim.
Be careful in any discussions leading up to an agreement. Even if you haven't signed an agreement, the following situations may be binding:
- if you tell a tenant they can have a property
- if the tenant says they’ll take the property
- if any money is paid.
Here are some tips on finding the best tenants for your property:
Ask them to complete a pre-tenancy application form
A pre-tenancy application form gathers important information about potential tenants. This can help you decide if a tenant is right for the tenancy.
You can start interviewing tenants while they fill out the pre-tenancy application form. Ask them if the property suits their needs and if they’re interested in living there. Let them know your expectations and answer any questions they have. For example, how much the bond is and when rent should be paid.
You might want to talk about:
- whether the property will suit them
- the last two places they rented and why they moved
- whether they’ve been involved in any tenancy disputes
- their circumstances and ability to pay the rent
- how many people will live in the house
- whether they have pets
- what sort of tenancy you both prefer (fixed-term or periodic)
- if they’re familiar with their responsibilities as a tenant. For example paying rent on time, telling you about maintenance or repairs, and keeping the place reasonably clean and tidy.
Let them know if you have specific terms you want to add into the tenancy agreement. For example no pets, or who’s responsible for mowing the lawns. Ask if they have any worries about meeting those terms.
Once you have all the information you need, ask for their consent to conduct a credit check. If they’ve completed a pre-tenancy application form, they’ll give their consent here. Then tell them you’ll contact them soon to let them know if they’ve been selected.
Check their references
Potential tenants provide details of two referees on the pre-tenancy application form. These may be a friend, a co-worker, their employer or anyone else who knows them well. It’s useful if one referee is the tenant’s current or previous landlord.
Ask the tenant to let the referees know you’ll contact them. If you can’t reach one or both of the referees, you can ask the tenant to provide the details of a different referee.
What to ask a referee
Ask questions to get an idea of the potential tenant’s behaviour. If the referee is a previous landlord, you could ask if the tenant:
- let them know when maintenance or repairs needed doing
- returned calls promptly
- kept the place reasonably clean and tidy
- was ever overdue with the rent, and what they did about it.
If you think a referee’s not being completely honest with you, you may wish to speak to another referee.
Check their credit history
Potential tenants give their consent for you to check their credit history on the pre-tenancy application form.
Pre-tenancy applications has more about credit checks.
Check if they have been to the Tenancy Tribunal
You might want to ask if the people who want to rent your house have been to the Tenancy Tribunal before.
You might want to talk about:
- why they went to the Tenancy Tribunal
- if they were the applicant or had an application made against them.
Don’t skip important steps
Don’t skip reference or credit checks because a tenant offers extra rent upfront. Never accept the tenants application to rent the property until you’ve done all your checks and fulfilled all legal requirements.
Be aware that you can’t discriminate
Discrimination has detailed information about discrimination in relation to renting.