Getting a lease when you don’t have a rental history
Occupying someone’s property carries legal responsibilities and demand for rental homes is fierce and it’s common to face hordes of rival tenants at open house inspection. So what can you do to get a rental lease if you’ve never had one before?
Get a guarantor
Guarantors are not solely used by first-home buyers. They can also help first-time-renters secure private market leases. Young people in particular may get a guarantor – parents or a family member – to back their application, which gives a guarantee the rent will be paid on time. Income may be tight and offering a guarantor can give young people that all-important start in the rental market.
Set up a direct debit
Many rental offices will insist on tenants using a direct debit payment system for rent payments. But even if it is not mandated, offer it as part of your application. It shows commitment to paying your rent on time every time and will be well received. If some or all of your income comes from Centrelink, remember you can use its Centrepay automatic payment system. This makes direct rent deductions from your social security payments and pays them to your private rental agency.
Show any proof of regular payments
Have you ever bought and paid off an appliance with a finance contract? If so, show this proof of regular payments to the property manager handling the home you want to rent. Any statement that shows a record of regular payments – even though it is not a rental situation – can help your case. What we need to show our property owners in prospective tenants’ applications is consistency and commitment.
How does your income stack up?
Revealing in black and white how you earn your coin is essential. Income “is a big one” for first-time tenants. Include as much information as possible about where your income comes from and how often you are paid, as this will stand you in good stead. If your grandparents send you $20 a week to “buy yourself a little treat” put it on the application. Every little bit helps you shine as solid tenant material.
How do you spend your money?
Like banks working out if you can service a home loan, so too property managers use a 30% formula when deciding if you can afford a rental home. In a nutshell, if rent is $300 per week, you’ll need to show regular net income of $1,000 per week ($300 = 30% of $1,000) if you are planning to live by yourself. If you only earn $900 net income per week you may struggle to get the lease as you could be stacked against other potential tenants who earn $1000 a week, always ensure you are looking and applying for properties in your price range and you aren’t over committing yourself. As an industry we follow general rules when assessing an applicant’s ability to pay the rent but if you can prove you spend less than average, there are exceptions.
If you are looking for a rental or you are thinking of leasing your property out contact the knowledgeable property managers at Dowling Mayfield for more information 0249600499