With the right tenant, owning a rental property offers a low-effort income stream. But with the wrong one, it can become an expensive, frustrating experience.
Tenant screening is how landlords manage that risk. It involves checking an applicant’s identity, ability to pay rent, rental history and references before offering them a tenancy. In New Zealand, screening needs to be fair, consistent and compliant with privacy laws.
While no amount of screening can eliminate risk entirely, a thorough process gives landlords a much better basis for making their decision.
Why Does Tenant Screening Matter?
Finding the right tenant doesn’t just give you the peace of mind that someone is taking good care of your property; it also saves you time and money.
Rent arrears and property damage create unplanned expenses that eat into the profit from your investment, while tenant turnover means more time spent advertising a vacant property.
A tenant screening process should give landlords enough relevant information to make an informed decision about who they trust with their asset, rather than relying on first impressions.
At Inspire Real Estate, our nationwide property management service includes tenant screening as part of the wider management process. For new clients, we also offer a 24-month rental guarantee covering vacancy, rental income and general property performance, subject to terms and conditions.
What Does a Good Tenant Screening Process Involve?
If you plan on screening tenants yourself instead of using a property manager, here are our tips for what to check and when:
– Application form: Collect relevant information and obtain consent for reference and credit checks.
– Identity verification: Confirm the applicant’s identity using appropriate identification.
– Ability to pay rent: Request evidence from preferred applicants, such as a payslip or previous rental payment record.
– Rental references: Contact referees at the appropriate stage, ideally including a current or previous landlord.
– Credit check: With consent, check the applicant’s credit history when actively negotiating a tenancy offer.
– Tenancy Tribunal history: Ask about previous Tribunal matters, including the circumstances and outcome.
Once you’re satisfied, you’re ready to prepare a compliant tenancy agreement.
What Can’t Landlords Ask or Do?
Tenant screening in NZ is subject to the Privacy Act 2020 and Human Rights Act 1993, so it’s important you know how to screen tenants, including what landlords can ask tenants, and what they can’t.
– Only collect personal information that’s necessary and relevant to the tenancy.
– Don’t request detailed bank transactions or information about spending habits.
– Don’t discriminate based on protected characteristics, including ethnicity, disability or family status.
– Apply the same assessment criteria to all applicants.
– Don’t skip reference or credit checks for higher rent payments.
The Office of the Privacy Commissioner and Tenancy Services provide guidance on what landlords can legally request.
What Should You Ask a Property Manager About Tenant Screening?
If you’re considering professional management, ask:
– What tenant checks do you carry out, and in what order?
– Do you follow the same screening process for every applicant?
– How do you record the reasons behind your tenant selection decisions?
An experienced property manager should be able to explain their process.
Get Expert Help with Tenant Screening
Good tenant screening is about following a consistent process, not trusting a gut feeling.
If you don’t have the time to commit to doing it well, it can be a great return on investment to bring in a property manager. Book a free rental appraisal or speak with the Inspire team today.
