Have you ever done a jigsaw puzzle before? You know the ones where you invest hours of time, plenty of money to purchase them in the first place and then you find out that someone has ‘moved’ the final piece so the picture isn’t quite complete? Frustrating, isn’t it?
If you’re a property investor, you might have to get used to working with a picture that isn’t complete. At least if the Privacy Commission watchdog’s latest report is anything to go by. In a recent statement, the Privacy Commission have issued a warning that there are plenty of landlords who could be breaching their tenants privacy when it comes to tenancy applications. While there are not calls for the tenant vetting process to change just yet, you can rest assured that this is threatening to change. Is there a chance that we could see the end of tenant vetting as we know it? Are you going to have to accept that being a landlord means not knowing much, if anything, about your tenant? Is gut instinct really enough when it comes to tenant selection?
In recent times, with stock numbers dwindling and the competition between tenants to secure rental properties getting tougher, landlords have been fortunate to have the pick of the bunch when it comes to choosing who they want to live in their investment property. The reality of it is, when you have an investment property, you are essentially running a business, so your chosen tenant is more like a business partner than a customer, in a way. With competition getting stronger, landlords have been drilling down into as much detail as possible to make sure that their new tenant is really the best choice for the property, with some instances even seeing property managers in Auckland ask for bank statements. But the new watchdog statement could put an end to all of that. Here’s a list of what information you can ask for from a tenant, and what’s a definite no no!
According to Privacy Commissioner, John Edwards, landlords are entitled to collect information prior to deciding if a tenant is suitable or not. This includes, their name and a proof of identity, contact information, a current landlord reference and two previous landlords as references. You can also ask if the tenant has ever been evicted, if they have a pet, or whether or not the tenant agrees to a criminal record check.
Scarily, the list of things that you should probably not be asking for is not only lengthy, but features a large number of items which are commonplace in tenant application forms. This includes maritial status, gender, age, employment status, nationality, the rent paid at their previous property, proof of insurance and further details on their current accommodation including the address.
It wouldn’t be far fetched to think that tenants might stop providing as much information as they have been, now that this recommendation from the Privacy Commissioner has come out. As landlords you may be getting into an environment where you are asked to make a decision with less information than you feel you need or is appropriate. If you’re confronted by this situation, it’s important to stick to the basics of tenant selection to try and limit the potential for risk. Stick to your gut. If a tenant makes a good first impression on you, often it’s a pretty good sign that they’ll be a good fit for both you and your investment property.
Look right back to the basics. Was the tenant easy to get hold of? Did they communicate well when they were arranging the booking? Are they respectful? All of these, while very basic, are often the foundations to a good relationship between tenant and landlord.
If you want to know more about how you could be breaching your tenants’ privacy, or you don’t know what you can and can’t ask a tenant, then feel free to get in touch anytime on 04 381 8604. It’s important to remember that in the ever-changing landscape of property investment, consulting an expert is the only way to protect yourself from missing a beat!
For obligation free advice, and to find out how you can sharpen up your bite in the rental market, give us a call anytime on 04 381 8604 or email us.