Like many firsts in life, landing your first rental lease can be challenging.
Landlords use rental histories to find the most reliable tenant for their home, which means first-time renters are at a disadvantage when it comes to securing a property – especially when there’s lots of competition for a home and all the other applicants have rental histories.
So what can you do to get a rental lease if you’ve never had one before?
Finding a rental can be challenging.
Fortunately, supplying a clean rental history is far from the only way to prove your reliability, explains Julie Tagg, property manager of Paul Flynn Property Group in Queensland.
Here are her five top tips to help you secure your first lease:
1. Find a guarantor
Above all else, landlords want to make sure that you’ll pay your rent on time.
One of the easiest ways to give them peace of mind is to find a guarantor – someone who can support your application and promise to pay your rental payments should you fail to meet them.
“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,” says Tagg.
“Income may be tight and offering a guarantor can give young people that all-important start in the rental market.
“Remember, once you have six months on your rental record, you are on your way.”
2. Set up a direct debit
Many rental offices will insist on tenants using a direct debit payment system for rent. But, even if it isn’t required, it helps to offer it as part of your rental application.
It shows that you’re committed to paying your rent on time, which, again, is one of the most important competencies when it comes to renters.
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.
“We use that quite a lot with tenants and it works very well,” Tagg says.
Offer to set up a direct debit payment system to show commitment to paying rent on time.
Apply for multiple rental properties with one application form using 1Form
Show proof of regular payments
Have you ever bought an appliance or electrical good with a finance contract? If so, showing your property manager proof of regular payments will go a long way towards proving your financial trustworthiness.
Any statement that shows a record of regular payments – even if it is not a rental situation – can help your case, says Tagg.
“What we need to show our property owners in prospective tenants’ applications is consistency and commitment.”
Provide evidence of your income
Tagg confirms income is a big one for first-time tenants. And the best way to prove you earn enough to service your rental payments is to ask your employer for a letter of reference.
The letter should include your exact salary, how long you’ve been working at the company and, ideally, a few sentences that suggest you’re doing well and unlikely to be laid off anytime soon.
If you’re a freelancer, you’ll need to provide as much information as possible about where your income comes from and how often you get paid.
If your grandparents send you $20 a week to “buy yourself a little treat,” put it on the application. Every little bit helps to prove you’re in the financial position to pay your rent on time.
How do you spend your money?
Similar to how banks work out if you can service a home loan, 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 only earn $900 net income per week, you may struggle to get the lease.
However, Tagg says there are always exceptions, and if you can show exactly how you spend your money in a typical week, it may get you over the line.
“In the end, it’s up to the prospective tenant to be proactive and prove their case to us,” says Tagg.
“As an industry, we follow general rules when assessing an applicant’s ability to pay the rent, but if you can prove [that] you spend less than [the] average [person], exceptions [can be made].”
Essentially, the harder you try to prove your trustworthiness, the more likely you to are secure a lease.
