In Australia’s perennially competitive rental property landscape, the chances of securing a good property– let alone one that meets all your requirements– may seem impossible.
Rapidly rising rents and the start of “rental bidding” further complicate the picture. Big changes to available rental properties during the holiday season and the start of the year can lead to rapid changes in the market.
However, it’s not all doom and gloom. Although it might seem that the rental market isn’t fair, and potentially collusive – particularly in large cities such as Sydney and Melbourne– experts say that new state tenancy laws to be implemented over the next 12 months will work to give some power back to tenants.
By learning what property managers want in their tenants, being fastidious while applying for rental properties and choosing the most appropriate time of the year to enter the rental market, you could meet or even exceed your own rental expectations.
1. Add a cover letter and make your unique story stand out
Not many property managers request a cover letter, but adding one to your rental property application can greatly enhance your odds of being the new tenant for your dream property.
A cover letter could end up with the property owner, who is usually absent from inspections but may be the final arbiter over which applicant is approved. Using a cover letter to tell a unique story and create an emotional bond with the owner may prove to be priceless, while costing very little time and effort.
Some property managers we’ve spoken to recommend a good story in your cover letter which lists your unique points and tells the property manager why you are the ideal tenant. A good story also helps you connect with the decision maker and improves your odds of being unique and therefore enhancing your ability to stand out from other applicants
2. Collate, organise, file and prep well in advance.
Although few agents ask for supplementary evidence or documents such as proof of identity, character references or testimonials to be added to your application, our resident property manager expert says potential renters are well advised to have these ready and include them in their application.
A couple or more references, coupled with other documents, collated in advance and provided early can give you an advantage over less organised applicants.
Having all your documents ready can make it easy for you to jump to the front of the queue and ensures that the property manager isn’t having to spend excessive time in following up. Less effort for the property manager for a qualified, prepared applicant makes everyone’s job easier, and also shows the manager that you are organised, and therefore likely to be a good tenant who pays their rent on time and is likely to take good care of the property.
Submitting an application with a recent payslip and a passport isn’t enough to make it interesting for the property manager. However, if the application has a great personal letter, a few proofs of salary or other evidence of regular income, with character as well as personal references with ample forms identification, it makes the quality of the application stand out, and all ready to go while also being an indicator of your organisational abilities and a beacon of your professionalism, both of which are good indicators of your likelihood of being a good tenant.
3. Wherever possible, submit an online application
Digitizing your printed documents and completing a digital application may not seem like the easiest thing to do, and could seem like a lot of effort and time spent - however it’s incredibly helpful and helps you stand out from the rest.
Most property managers are dealing with multiple properties and multiple applications per property, which can lead to many stacks of paperwork. Online applications generally make life easier for the property manager, and although they might seem tedious for a renter, doing it once means you are ready to go for multiple properties - making your life easier too.
The majority of online application forms will also have a space for personal commentary or remarks, so make sure you use it. The common application form most managers use actually asks potential tenants to detail what appeals to them about the specific property and filling it out can be really helpful. This section is critical for some property managers when they view an application because it gives them a good indication of the kind of the prospective tenant.
4. Tread with caution when going above the asking rent price
Australia’s general under-supply of properties central to CBDs has driven a rise in rental bidding - the process of offering to pay a higher rent than advertised, so as to secure the property.
Tenancy industry body experts concede that this tactic may produce results for those who are not concerned about the marginal increase in cost, however it could have negative impacts in the longer term for the market in general and the renter specifically.
Rental bidding is driving higher rents for other tenants as well as the applicant. By signalling an ability or willingness to pay more than required, renters enhance the likelihood of rental rate increases in the next few years, furthering Australia’s general lack of affordable housing, particularly in major cities such as Sydney and Melbourne.
5. Have your deposit ready to go.
Just because your application got the nod of approval, it doesn’t necessarily mean that the property manager will be able to wait for your deposit. If the property manager calls a prospective tenant to tell them their application is successful and asks for their deposit, and they do not indicate a willingness or ability to pay it straight away, the manager is likely to go straight to the next applicant.
Rental agents advise that a slow approach or lack of urgency with paying your deposit may end up costing the applicant. When applicants are slow with their deposit, agents are not willing to miss out on other qualified and willing applicants. Standing-by for 24 hours for a deposit to be transferred in a fast and highly competitive moving rental market could lead to missing out on other qualified tenancy applications because they went to other properties.
Rental agents advise that a slow approach or lack of urgency with paying your deposit may be end up costing the applicant. Even waiting just 24 hours to send the deposit in a fast and highly competitive moving rental market could lead to missing out on other qualified tenancy applications because they went to other properties.
Most property managers feel that if an applicant is not ready with they deposit, they may not be the most consistent tenant, as waiting to pay a deposit often means that they’re either wanting to get into another property they’ve applied for or that the rent is not in their price range.
6. Find the right time to start your hunt.
House-hunting during the new year, while most people are still on the holiday hangover, can often lead to excellent results because of the lower competition and the increased opportunity to connect personally with the agent and make a memorable impression.
If there’s no urgency, waiting until the months of March and April can pay off, as properties that remain vacant during the January/February rush, can often post cheaper rents, to encourage a tenant to move in quickly.
Based on data from Domain, rental listings are at their lowest levels between Christmas and Australia Day due to the holiday season.
If you’d like to increase your chances for success as well as the number of available options, wait until the end of Jan or the first weeks of February, which is the time when many property owners are back from their time. A factor to keep in mind though is the increased competition in lower rent suburbs as university students enter the market in this period.
While the quantity of rentals on offer rarely varies significantly across the seasons in Australia, the numbers can vary greatly across the start of every year between New Year and March.
7. Don’t let youth or a lack of rental history stand in your way.
When seeking a new tenant, property managers and property owners are mainly trying to assess two principal potential risk factors - the possibility that the tenant will be able to pay their rent on time for a long sustained period, and if they are likely to cause a deterioration to the property value through carelessness or negligence.
Some property managers say they have rented properties to unemployed applicants because they were able to demonstrate a good balance in their savings account. Additionally, some have rented to applicants who had less money, but a better personal connection or a strong character reference.
Renters often assume that a strong rental history and being responsible and experienced are the be-all and end-all of the rental market, however there is more at play in the real world.
A record of paying rent continuously is a way of demonstrating that you are a low risk applicant, however it’s only one of many ways of doing so - strong character references from employers or other professionals might also stand you in good stead.
Ultimately, it pays to be thorough and painstakingly rigorous with your tenancy application while letting your personal story shine through and creating a personal bond with the property agent. Think about the process from the agent’s point of view and you will go a long way in achieving success in the hunt for the right rental property.