Congratulations. You’ve bought your first investment property! You now join a growing number of property investing Aussies in becoming a landlord.

Investing in a rental property is an important first step in building future wealth. To make sure your landlord experience is a positive one it pays to consider the ways you can keep it that way.

Regardless of whether you go it alone or engage a property manager the steps for attracting and retaining the right tenant(s) for your property should be your most important objective. It pays to ensure your property manager also shares these objectives. After all, happy tenant = happy landlord!

Good tenants are a key element of maximising the return on your property investment. A good relationship with tenants minimises the prospect of issues such as late payment of rent and damage to the property.

Developing and maintaining a good relationship requires some work. It is unlikely to happen if you just take their money and forget about them. Nor will they be happy having constant inspections.

What is the first step?

It is vital to attract good quality tenants in the first place. Ensure your property manager understands your expectations. Ideally, you should be wary of applicants who:

• find fault with every minor defect despite the property being near perfect
• do not supply supporting documentation or references
• have any history of payment arrears
• move frequently
• are poorly presented

It pays to consider the following points when looking to attract and retain the right people for your property:

Set a fair rental price. While rents have increased dramatically in many areas you shouldn’t automatically hike up the rent on your property. Use the area average as a guide – going too high will limit the pool of applicants from which to choose.

Highlight your property’s features when advertising. Ensure your property manager focuses on the best features of your property. Include local benefits such as shops, schools, public transport, pubs and restaurants.

Check references. All applicants should provide a reference from their previous landlord. Make sure they are called! They should be asked about the condition of the property on the tenant’s departure, if rent was always paid on time and if there were any complaints from neighbours.

Ensure your property is immaculate. To attract the best tenants it is essential the property is in perfect order. Fix any problems, ensure the property is clean and the gardens are neat and tidy. Investing in a fresh coat of paint is well worth the effort.

Be a good communicator. If your tenants are keeping the property in good order and paying rent on time they’re worth keeping. Ensure your tenants get plenty of notice if you or the agent are going to call or make an inspection.

How to keep good tenants

Now you’ve found great tenants it is equally important to maintain a good relationship. Mutual respect is a two way street. Showing them you are interested in both them and your property may minimise possible issues.

Here are some issues important to a good tenant:

Attend to maintenance issues promptly. A quick response to problems is a good indicator to a tenant of how much they are valued. Blocked drains, broken water heaters etc affect a tenant’s enjoyment of the property. If it’s not a quick fix they still need to be kept informed of progress. Also follow up after the repairs. This goes a long way to building rapport.

Ignoring maintenance issues could leave you with a legal liability if a tenant or their guest is injured as a result.

Undertake regular inspections. This allows you and your property manager to be sure the tenant is looking after the property. It also gives the tenant an opportunity to discuss maintenance issues and shows them you take an active interest in the condition of your property.

Maintain a positive relationship. This helps to ensure they remain cooperative throughout their lease period. Listening and considering requests for changes to lease conditions or addressing concerns also help build rapport. If a request is rejected it should always be in writing with sound reasons for your rejection.

Be realistic about damage. Even the most careful of tenants can have accidental damage. If their track record is good there is nothing to be gained from an unreasonable reaction. All landlords should consider having landlord insurance that generally covers both accidental and malicious damage and loss of rental income. If tenants feel they have a good relationship with you and your property manager such claims should hopefully never be necessary!