How to Choose Good Tenants
By Kellie Andriessen – Newcastle Property Management
Choosing the right tenant is one of the most important steps in protecting your investment property. A great tenant pays rent on time, cares for the home as if it were their own, communicates openly, and helps make the management process smooth and stress-free.
Pick the wrong tenant, though, and it can quickly turn into a costly and frustrating experience. While landlord insurance can cover some of the financial losses, careful tenant selection from the start is always the best safeguard.
At Newcastle Property Management, we follow a structured screening process to help our landlords secure reliable, respectful tenants who treat their rental like home.
Step 1: Application and Identity Checks
A consistent and compliant screening process is the foundation of good property management.
Here’s how to start:
- Use a standardised rental application form for each applicant listed on the lease.
- Verify all personal details and sight original ID such as a driver’s licence or passport.
- Confirm current address and rental history through utility bills or references.
- Check for pets, smoking, or occupancy details to ensure the property is suitable.
- Meet applicants in person whenever possible to assess communication and reliability.
All personal information must be handled in accordance with NSW privacy and tenancy laws.
Step 2: Reference Checks That Matter
A tenant’s past behaviour is often the best indicator of their future reliability. Thorough reference checks provide valuable insight:
- Previous landlords or agents: Ask about rent payment history, property care, length of tenancy, and whether they would rent to the tenant again.
- Employment verification: Confirm current role, length of service, and income stability. For self-employed tenants, request an ABN and supporting financial documents.
- Personal references: Speak to referees who can comment on the applicant’s character and dependability.
If a tenant has limited rental history, additional references may be useful. Always discuss any inconsistencies openly before making a decision.
Step 3: Financial Suitability
A tenant’s ability to afford the rent comfortably is crucial. The general guideline is that rent should not exceed around 30% of household income.
To confirm affordability:
- Request recent payslips, bank statements, or an accountant’s letter.
- Verify other income sources if applicable.
- Review past rent payment patterns or deposit ledgers.
- Conduct a credit check (with permission) when appropriate.
Reliable tenants demonstrate financial stability and understand the ongoing responsibility of maintaining rent payments.
Step 4: Recognising Red Flags
During the screening process, keep an eye out for warning signs that could indicate future issues, such as:
- Gaps in rental history or frequent relocations.
- Unresponsive or unverifiable referees.
- Previous late payments, property damage, or tenancy disputes.
- Unstable employment or reluctance to share financial documents.
- Attempts to negotiate bond reductions or pay large amounts in cash.
While no system is foolproof, identifying risks early greatly reduces the chance of tenancy problems later.
Step 5: Work With an Experienced Property Manager
A professional property manager knows how to balance tenant rights with landlord protection. From verifying applications to ensuring compliance with the Residential Tenancies Act (NSW), we take the guesswork out of tenant selection.
At Newcastle Property Management, we combine thorough screening with experience, intuition, and genuine care for your investment. The result? Better tenants, longer tenancies, and fewer surprises.
The Bottom Line
Good tenants are the foundation of a successful investment property. Taking the time to assess applications carefully — and partnering with a trusted property management team — helps you protect your asset, maintain rental income, and enjoy peace of mind.
For professional advice on tenant selection or managing your rental property, contact Kellie and the team at Newcastle Property Management today. Phone 4956 9777 or email us at mail@newcastlepropertymanagement.com.au.