How to Select the Ideal Tenant for Your Investment Property

Choosing the right tenant is one of the most important decisions a landlord can make. A dependable tenant not only pays rent on time but also treats your property with care—reducing the likelihood of damage, disputes, or costly repairs. If you're managing your rental privately, a thorough screening process is essential to protect your investment and ensure a smooth tenancy.

 

Know Your Legal Responsibilities

Before reviewing applications, make sure you're familiar with your obligations under anti-discrimination laws. The Equal Opportunity Act prohibits landlords from rejecting applicants based on:

  • Age, gender, race, or religion

  • Marital or parental status

  • Sexual orientation or disability

  • Mental health conditions

Each state and territory may have specific requirements, so it's important to consult local legislation to ensure your selection process is fair and compliant.

 

Essential Documents to Request from Applicants

To assess a tenant’s suitability, request the following documentation:

  • Valid photo ID (e.g. passport or driver’s licence)

  • Proof of income (recent payslips or bank statements)

  • Evidence of current address (utility bill or lease agreement)

  • Employment reference (from a manager or HR representative)

  • Character reference (from a non-family member)

These documents help verify identity, financial stability, and overall reliability.

 

What to Evaluate When Screening Tenants

1. Financial Capacity

Ensure the applicant can comfortably afford the rent. A general guideline is that rent should not exceed 30% of their gross monthly income. If the tenant is a student or has limited income, consider requesting a guarantor to co-sign the lease.

2. Rental History

A strong rental track record is a good predictor of future behaviour. Contact previous landlords to ask about:

  • Timeliness of rent payments

  • Property maintenance and cleanliness

  • Reasons for vacating

3. Tenancy Blacklists

Use national databases such as TICA to check whether the applicant has been flagged for issues like unpaid rent, property damage, or eviction.

4. Pet Ownership

If you allow pets, include clear terms in the lease—such as professional cleaning or pest treatment upon vacating. In some states, like Victoria, landlords must apply for formal approval to refuse pets.

5. Reason for Moving

Understanding why the tenant is relocating can offer insight into their long-term intentions. Frequent moves may signal instability, while job-related relocations often indicate a need for longer-term accommodation.

6. Personal Impressions

While you must avoid discriminatory decisions, your instincts still matter. Applicants who are punctual, well-prepared, and respectful during inspections often make responsible tenants.

 

First-Time Renters: What to Consider

Applicants without rental history—such as students or young professionals—can still be excellent tenants. To assess their suitability:

  • Confirm stable income or financial support

  • Request strong personal or professional references

  • Consider a guarantor to provide added security

 

Tenant Selection Checklist

✅ Conduct a background check through a national tenancy database

✅ Verify employment and income stability

✅ Review references from previous landlords or employers

✅ Assess affordability based on income-to-rent ratio

✅ Clarify pet policies and lease conditions

✅ Ensure all legal documents are in place before signing

 

Final Word

Finding the right tenant takes time and diligence, but it’s worth the effort. A well-screened tenant can lead to a long-term, low-maintenance tenancy that protects your property and your peace of mind. By following a structured process and staying compliant with legal requirements, you’ll be well-positioned to make a confident, informed decision