Many Australians don't have any other option than renting before being able to buy a home. But if you have never rented a property before, you may feel a bit stuck without rental references from previous landlords. The good news is that you can still demonstrate that you would make a good tenant.
First, you need to understand why these references are required. Then, you will be able to tailor your application to secure a place, even as a first-time tenant.
What is a rental reference?
A reference is simply a letter or document that vouches for your ability to meet your financial commitments, be depended on and can be trusted.
A reference needs to be written by someone that is associated with you. Ideally, this would be a previous or current landlord. But if you are a first-time renter with no references, then you can ask your boss, colleague, roommate or even your neighbours to provide one.
The purpose of a reference is to give your potential future landlord an idea of who you are. So don't hesitate to provide at least two. These references will help them know what they can expect if they were to have you as a tenant at their property.
How to obtain a property as a first-time renter
Even though you have never rented a home before, it is still possible to get approved for a property.
While references from previous landlords are requested, that is not to say you can't demonstrate your trustworthiness in other ways. You will need to show that you can pay your rent on time, take care of the property and meet the terms of the tenancy agreement.
If you can prove that you are responsible, tidy, and have a good history of paying bills on time, you are on track to renting your first home. Even though you can't provide a reference from a previous landlord, there are plenty of other documents that can put you in good stead.
For instance, verification of your employment or regular income assures your landlord or property manager that you will pay rent on time, while a record of monthly mobile phone bill payments is also helpful.
If you have been living in student accommodation, you could also offer a reference from the complex manager.
References from your employer or manager can demonstrate your sense of responsibility, while references from teachers, neighbours or even your doctor can help bolster your application.
First Time Renting Tips
If you’re renting for the first time but don’t have the rental history to back you up, then you likely feel anxious about where to begin. Thankfully, there are several ways to demonstrate in your first rental application that you’re of good character and have the financial means to be a good tenant.
Use the following tips as a guide for first-time tenants looking to secure their first rental property without reference.
1. Give the landlord a sense of security
Landlords want to keep their investments in good condition. While they have certain obligations when it comes to maintenance, some responsibility falls on the tenant, too.
For instance, you will be required to keep the property clean and tidy. Whether you used to live under your parents' roof or in a student hostel, you likely experienced rules relating to general household tidiness at some point. As a tenant, you will need to ensure your bathroom gets appropriate airflow to avoid mould, tidy up any spills, and prevent damage to the flooring, walls or fittings.
Your landlord will also appreciate being informed of any maintenance issues that arise promptly. For instance, if you notice a leak, be sure to get in touch with them straight away. This allows them to remedy any problems in a timely manner, both for your own enjoyment of the property and to avoid a problem compounding into a more significant issue.
2. Provide a guarantor
A guarantor is someone who can make your rental payments if you fail to meet them. Generally, a guarantor will be your parents.
Landlords want to know that you’ll pay your rent on time. By having a guarantor, you give landlords the guarantee that the rent will be paid on time, making your application more favourable.
This option is great for anyone whose income may be tight or inconsistent, as well as for young people who are just moving out of home. If you decide to add a rental guarantor, mention on the lease that they won’t be living at the property as this can improve your application success.
3. Show proof of income
Showing the landlord proof of regular payment will help you in demonstrating financial trustworthiness. You can also provide evidence of your income to show the landlord that you earn enough and are likely to be able to meet all your future rental payments.
If you are a freelancer or don’t receive a regular income, you’ll need to provide as much evidence as possible. One of the best ways you can do this is by providing the landlord with your most recent tax return alongside client contracts or evidence of any savings that you may have.
4. Offer repayment
Some landlords or real estate agents may consider your application if you’re willing to pay extra money upfront. With no rent history, offering to pay 3 months of rent in advance may help to show your commitment and financial stability. This, alongside a cover letter outlining your positive traits and personal references can help go a long way in securing your first rental.
5. Set up direct debit
Many rental offices expect tenants to use a direct debit payment system for rent. However, even if it isn’t required by your potential landlord, you should still offer it as part of your rental application. This is because it shows you’re committed to paying your rent on time.
6. Expand your search
If having no rental history stands in your way of getting a rental, then consider broadening your search. Some ideas include looking for shared accommodation where landlords are typically more lenient. Shared accommodation also means you can split rent costs which helps to save you money. You can also look for private rentals online or seek a rental agent who can help you find rental options which suit your circumstances.
Renting for the first time can be an exciting but stressful experience. To help set you up for success, the team of experts at LJ Hooker has put together a guide to renting your first home. It will get you up to speed and ready to move in.
DISCLAIMER - The information provided is for guidance and informational purposes only and does not replace independent business, legal and financial advice which we strongly recommend. Whilst the information is considered true and correct at the date of publication, changes in circumstances after the time of publication may impact the accuracy of the information provided. LJ Hooker will not accept responsibility or liability for any reliance on the blog information, including but not limited to, the accuracy, currency or completeness of any information or links.
