Today’s conversation dives into a critical — and often underestimated — part of property investing: tenant selection.

After 15 years in property management, Kat shares lessons learned from both landlord wins and costly mistakes. While we often focus on maximising rent and minimising vacancy, the real leverage point in a smooth tenancy is choosing the right tenant from the start.

A Real-World Scenario

In this episode, Kat discusses a situation where:

• A lease was signed

• A deposit was paid

• The property was taken off the market

• The tenant later revealed they couldn’t pay the bond

The result: back to market, increased vacancy, added stress, and additional costs.

The key question becomes: how do landlords and property managers avoid getting on the back foot in the first place?

Know Your Tenant Profile

One of the biggest mistakes landlords make is not understanding their property’s natural tenant demographic. Your property type and location heavily influence:

• Likely income levels

• Household size

• Lifestyle needs

• Employment type

• Inspection availability

A property near a university will attract a different tenant pool than a four-bedroom family home in the suburbs. Tenant selection starts with knowing exactly who you are targeting and marketing accordingly.

Affordability Pressures Are Real

Over the past five years, rents have surged across major cities. Many renters are now allocating 35–50% of their income toward housing, compared to the traditional 25–30% benchmark once considered sustainable.

The reality is simple:

• You cannot sustainably increase rent if your tenant cannot afford it

• Pushing too hard increases the risk of arrears

• Vacancy often follows affordability stress

Four Key Tenant Selection Tips

If you have a property on the market or coming up for lease, focus on:

• Rental history — Payment ledgers don’t lie. Review payment patterns, inspection reports, and cooperation history.

• Employment and income stability — Ensure affordability aligns with today’s economic conditions.

• Lease terms — A 24-month lease may sound secure but limits rent reviews and may not guarantee stability under break-lease conditions.

• Suitability and long-term intent — Why are they moving? How long do they genuinely plan to stay? Does their situation align with your property?

Units vs Houses: A Changing Story

Contrary to common belief, unit rents have outperformed houses in many markets over the past five years. As affordability tightens, renters are trading:

• Extra bedrooms

• Backyard space

• Larger homes

For more manageable weekly rent.

Understanding these behavioural shifts allows landlords to position their assets smarter and reduce risk.

The Big Takeaway

If you fix one thing in your property management strategy, fix tenant selection.

• Cut corners here and you will likely pay for it later

• Get it right and the tenancy becomes smoother and more predictable

In today’s rental market, smart tenant selection is not optional — it is essential.