Property Success Tip 3 – Know Your Tenant Profile

Running a rental portfolio you’ll find there is a range of different tenant types or ‘tenant profiles’ you’ll be able to rent to.

The main ones to consider are….

  • Working Tenants
  • Local Housing Allowance Tenants
  • Student Tenants
  • Corporate Tenants

However there not all crated equal and each group has its pros and cons.

For example…

Working Tenants are popular with investors because they are generally seen as more reliable payers, they have employers references confirming their income to pay the rent, and are more likely to be able to get a guarantor if needed.

Unfortunately, they can also be more demanding when it comes to wanting the latest kitchens & bathrooms and more modern properties.

We’ve found depending on the age of the tenant profile and local market, they can tend to stay for shorter periods too.

This is usually because they become buyers when they move up the corporate ladder, or as they progress through their career they may relocate due to work purposes.

By comparison, many investors avoid housing allowance tenants.

They see them as more likely to go into arrears and, because they don’t have an income or assets, are harder to chase for lost rent.

However, these tenants also have their advantages.

Firstly, personally, I’ve found they tend to stay the longest in properties and they are usually less demanding about the initial decoration of the property and age of items like a brand new kitchen.

Last but not least, because these properties tend to be in ‘unfashionable’ areas or housing estates, and often in areas with a smaller percentage of homeowner occupation, you can often pick up these properties for great prices.


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Which brings us to…

Which Is The Right Tenant For You?

The sort of tenants that suit you will depend on your investment goals, your strategy, your ability to attract and manage specific types of tenant… and, quite frankly, the amount of hassle you’re willing to put up with.

This is why, when I work with clients and investment partners, we always start by discussing their investment goals. That way, when it comes to trading ROI against time and hassle, we know where to draw the line.

And, once we decide which types of tenant we’re willing to go after, we can then understand which types of property and which parts of town we should consider investing in.

4 Questions To Get You Started

Choosing your tenant profile is relatively easy, but as this will dictate your strategy, it is important to take some time to consider it carefully.

There are 4 questions you should ask yourself:

  • What is my personal preference? Do I mind which tenant profile rents my property?
  • Do I have the experience – or do I have a letting agent with the experience and knowledge – to successfully
    manage this tenant profile?
  • How will this tenant profile affect the areas and achievable rental yields of where I will purchase my
    property investment?
  • Will the tenant profile affect how I finance the investment? And, if so, how?

Answering these questions should give you deeper insight into your ideal tenant profile – and that’ll help you plan your investment strategy.

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One Response to “Property Success Tip 3 – Know Your Tenant Profile”

  1. real estate investment says:

    I have been in the property market for over 8 years now and I have learned alot from this! I highly recommend all property owners give this a read!

    Thanks for sharing, very informative!

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