Changing the Way: Approving Tenancies During COVID-19
While the world might be slowing down to stop the spread of COVID-19, there’s still a need for people to rent and landlords to tenant their properties. As the leasing process continues, it might be an opportune time to do things a little differently in the property management space.
Open homes are still restricted, with by-appointment private inspections taking place instead. Property managers have been complying with regulated social distancing rules and taking precautions to keep staff, tenants and prospective tenant safe. Prior to COVID-19 however, it was a normality for property managers to list a property for rent, advertise open home times and walk a herd of prospective tenants through the home. After a few showings, you’d except multiple application forms to begin processing. From there, the property manager would have a prospective tenant criteria and begin to process the list of candidates (which sometimes could take several hours!) before sending the application off to the landlord for their consideration and approval. Once approval was given, we would bind the tenant to the tenancy agreement, send them a copy and ask them to pay their bond and first lot of rent.
However, one must ask: Is this process going to continue to work where we’re unable to create competition in the marketplace? Potentially not. In light of this, I’ve assessed different ways we can process the tenancy applications and streamline the viewing process to ensure we still have the opportunity to lock in the best possible tenants in the quickest possible time.
Now more than ever, property managers want to be dealing with genuine interest. We must ensure to assess the genuineness of an enquiry at the initial stage. Asking questions around their desired timeframes, needs, whether they’ve applied for other properties and if they’re familiar with the property, it’s surroundings and the suburb in general will give you a clear indication whether a prospective tenant is suitable for a by-appointment private inspection. This isn’t only going to save you time, but it ensures you’re reducing face-to-face contact with general members of the public.
Virtual inspections and videos of the home are becoming more prevalent in the current climate. This use of proptech leaves nothing to the imagination, meaning you’re likely to cull a lot of bogus enquiries by using this step first.
What this all means is that you’re now likely to be processing applications one at a time as the competition hasn’t been able to be created like it would in a normal market. However, spending 15 minutes in obtaining the prospective tenant’s ability to afford and maintain the property will allow you to make a better-informed decision to proceed with a physical inspection and hopefully, commit the best prospective tenant to the tenancy.
In my opinion, property managers need to reverse the order of process during COVID-19 to:
- Obtain enquiry
- Qualify enquiry
- Process application
- Conduct physical inspection
- Commit to tenancy
I remember this process being used some 20 years ago in New South Wales when I applied for a flat with a friend. We went in to enquire about a newer 3-bedroom unit we saw in the newspaper and were asked to complete an application. We were then told the agent would be in touch. The next day we received a call advising that our application wasn’t suitable for the property we enquired on, but was suitable for a flat that would be available in two weeks’ time. We were escorted through and told if we paid the bond, the property was ours – a relatively hassle-free process that ensured we weren’t renting a property that wasn’t suitable for our needs.
Whilst the fast and the furious approach of leasing has served us well in creating competition and reducing vacancy rates for our landlords, this approach simply isn’t sustainable in the current COVID-19 climate. While my ‘old-school’ suggestion may not be to everyone’s liking, perhaps you may use this article as a prompt to reassess how to best tenant your vacant properties during this time of uncertainty and change.