The Importance of Selecting and Retaining High Quality Tenants in Today's Market
Selecting and keeping the right tenants is crucial for maximising your rental property's potential.
Recently, the Australian rental market, especially in cities like Brisbane, Adelaide, Canberra, and Perth, has started to stabilise after a period of significant growth.
This stabilisation signals a healthy, normalising market. Experts advise that during this period, it is important for investors to manage their expectations.
Instead of pursuing unrealistic rent increases, the focus should be on attracting high-quality tenants and ensuring their long-term satisfaction.
By doing so, you can reduce maintenance costs, minimise vacancy periods, and enhance the overall value of your investment.
Financial Benefits of Quality Tenants
A report by the Real Estate Institute of Australia (REIA) highlights that:
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Properties with carefully selected, long-term tenants experience 22% less wear and tear.
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These properties also require 30% fewer urgent repairs compared to those with frequent tenant turnover.
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Landlords who choose stable, long-term tenants save per year on vacancy costs, advertising, and property management fees associated with finding new tenants.
Strategies for Attracting and Identifying Quality Tenants
While the current market favours landlords, attracting high-quality tenants requires strategic thinking:
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Property Presentation and Maintenance:
Data from Domain's Rental Report shows that well-maintained rental properties not only command 10-15% higher rents but also attract higher-quality tenant applications.
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Effective Screening Processes:
Implement thorough background checks, employment verifications, and reference checks. A study by CoreLogic found that landlords who used comprehensive screening processes reported 45% fewer issues with tenants over the lease term.
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Leveraging Technology:
Use online application systems to efficiently manage the high volume of interested tenants. Properties using AI-enhanced screening technologies processed applications 60% faster and identified preferred candidates more effectively, according to a survey by the Property Management Institute of Australia.
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Clear Communication of Expectations:
The Australian Housing and Urban Research Institute reported that properties with well-communicated tenant expectations attracted applicants who were 40% more likely to align with the landlord's ideal tenant profile.
Why Tenant Retention Is So Important
Even with many potential tenants, retaining good tenants remains crucial for a variety of reasons:
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Consistent Income Stream: Vacancies between tenants can be costly. The REIA report showed that properties with long-term tenants had 50% less vacancy time overall.
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Reduced Wear and Tear: Tenants who stay longer tend to treat the property with more care. A study found that properties with tenancies lasting over two years had 35% lower maintenance costs.
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Word-of-Mouth Marketing: Satisfied long-term tenants become advocates for your property. In competitive rental markets, 42% of high-quality tenancy applications came from referrals by current or past tenants, according to CoreLogic's data.
How To Retain High Quality Tenants For Longer
Even with plenty of tenant options, keeping good tenants should remain a priority:
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Reasonable Rent Increases: Given the current market conditions, it's important to keep rent increases moderate. For instance, in Brisbane, maintaining fair rent prices is crucial for tenant retention. The Tenants' Union of Victoria found that 82% of tenants who described their rent as "fair" intended to renew their lease, compared to only 30% who felt their rent was "overpriced."
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Responsive Management: Address issues promptly to maintain tenant satisfaction. The Australian Rental Market Report showed that responsive landlords retained tenants for an average of 3.5 years longer than those perceived as unresponsive.
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Property Upgrades: Regular improvements show value for long-term tenants. Properties with recent upgrades had 32% longer average tenancy durations, according to the Australian Housing and Urban Research Institute.
Maximise Your Rental Investment with Expert Property Management
In today’s stabilising rental market, selecting and keeping the right tenants is essential to maximise your investment. At Aurora Realty, we specialise in finding and retaining high-quality tenants, so you don't have to.
If you want expert advice and stress-free property management, that's what we're here for. With thorough tenant screening, responsive management, and proven retention strategies, we ensure your property is well-managed and profitable.