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You’re responsible for tenant selection – and you’ll need to live with the consequences

1st March 2015
Tenant selection: you’re responsible for what will happen!

Tenant selection: you’re responsible for what will happen!

Have you ever watched the television programme, ‘Renters’? It follows Property Managers and reveals the kinds of extreme issues they face in their work.

In a recent programme, a Property Manager completed an inspection to find holes in walls, and cabling along walls for the cannabis growing facility in the ceiling.

Most television viewers would be asking themselves how long this damage had been present: did it suddenly appear just before this inspection, or had the problem existed for a while?

It’s likely that the damage had been in existence for a while

Extensive damage like this doesn’t just appear overnight, it progresses over time.

However, one of the Property Managers on ‘Renters’ said that she didn’t like doing inspections “because she felt like she was intruding”.

Excuse me?! Who is this Property Manager working for: for the property owner, or for the tenants?

This highlights the problem that so many NZ Property Managers believe that the tenant is their client

It’s hardly surprising that the Property Manager is confused if they receive remuneration from both the property owner (in terms of the management fee) and from the tenant (in terms of letting fees).

Remember: the property owner is the client – always

The only client a Property Manager should have is the property owner. And it’s the Property Manager’s job to safeguard and monetise the property owner’s asset.

So when on ‘Renters’ a tenant was filmed smoking in side the house (in front of the Property Manager), that’s completely unacceptable.

Another time, dogs were often found at properties where it was stated in the tenancy agreement that dogs weren’t allowed. The attitude from the Property Manager was, “oh well, let’s not tell the landlord”.

Likewise, allowing a build up of mountains of rubbish on the exterior of a property is inexcusable.

This is not property management!

The owner of one rundown and damaged property commented, “at least we’ve still got our house”.

In these situations, the rent may be getting collected by the Property Manager, but they are not actually ‘managing the properties.

How can you avoid these worst-case scenarios from happening to you?

There are three things that you can do to ensure that your property doesn’t get featured on ‘Renters’:

1. Choose a property management company that doesn’t charge letting fees

If letting fees are charged, the Property Manager will be confused as to whom their client really is. Removing letting fees from the equation makes it clear-cut who the customer is.

Moreover, a Property Manager who doesn’t charge letting fees will make your property investment more profitable. What’s more, the property owner’s income actually decreases when there are letting fees in place.

2. Follow a well-thought-out tenant selection process

The whole problem of nightmare tenants won’t even exist if you set out to attract A1 tenants. And the way to attract A1 tenants is to follow a well-thought-out tenant selection process.

Following a tenant selection process may take a little time, but if you make the wrong choice you would be making a far larger investment of time at the end of the tenancy.

After all, if you choose a sub-standard tenant you are likely to be spending a lot of time at mediation and at tribunal. Then there are the financial costs of repairing damage or covering lost rent, plus all the time spent at the District Court in re-enforcing the monetary order.

Choosing the wrong tenant can be expensive in terms of both time and money.

The decision that you make at the outset could be the difference between that scenario… or 2, 3 or 5+ years of problem-free management, without rent arrears or damage.

All you have to do is choose the right tenant.

Remember, tenant applicants don’t come with a label that says ‘A1 Tenant’ or ‘Warning: High Risk’. That would be nice, wouldn’t it! But instead it’s up to you to make the right choice.

3. Be a Property Manager, not just a rent payment gateway

The Property Managers on ‘Renters’ aren’t actually managing the properties; they’re just acting as a payment gateway.

A true, authoritative Property Manager who’s working for the property owner’s best interests will:


Not all Property Managers are created equal, so engage a Property Manger with your eyes wide open.

You want someone who:

  1. Does not charge letting fees, so that the Property Manager is totally focused on the property owner being their client.
  2. Follows a defined and robust tenant selection process that’s geared at attracting A1 tenants, and will only accept A1 tenants.
  3. Acts as a true, proactive Property Manager, and is not just a rent payment gateway.



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