Just like landing your first job, there’s always a first time you’ll get a rental property. So how do you score a rental with no rental history?
Rental history is looked at when landlords are trying to figure out how your last living situation went. They want to know if you had a disastrous relationship with your previous landlord or a great one, that is. If you’ve never had one…that’s a different story.
All landlords are in search of reliable tenants that they can trust to take care of their property and maintain good relationships. If you are a first-time renter, you are at a slight disadvantage, though.
How do you prove you are reliable if you have nothing to show for it? Well, securing a property with no tangible rental history takes more than just giving your word.
Fortunately, you are not the only one who has faced a challenge such as this one. Luckily, there are other ways you can prove your reliability.
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How can I rent with no rental history?
1. Guarantee a guarantor
The number one concern that landlords have when accepting new tenants is if they will pay on time. Paying on time is a true indicator of if you have what it takes to be a great, successful tenant.
Since you have no way to prove that you will consistently pay rent on time, there are other avenues that you can take.
An easy way to appease the concerns of a stressed landlord is to find a guarantor. A guarantor is someone who is able to support your application and vouch for you in case you are not able to pay your rent on time.
If you are young and ready to finally move out, it is common to seek a parent or family member to be your guarantor. A guarantor letter is necessary when that person agrees to commit to taking the financial responsibility for you in any case.
A landlord will not be able to deny someone else backing your application if they guarantee that the payments will be made if you were to face extenuating circumstances. This way, they will receive the payment, nonetheless.
Once you have lived in a place for six months, you will gain a rental history. By having a guarantor, you can get a jumpstart in the rental market.
2. Sort out payment
After you have found a trustworthy guarantor to have your back, you should sort out your payments. Typically, rental offices prefer when tenants use a direct debit payment for their rent.
If this sort of payment is not required, it still helps with your rental application. A landlord seeing that you are committed to paying rent on time will more likely trust you as a tenant than otherwise.
As someone who receives their income from Centrelink, you can also use Centrepay as an automatic payment system.
The way Centrepay works is by making direct rent deductions from social security payments and paying them to your private rental agency. Essentially, the middleman, also known as you, is taken out of the equation!
This way, your future landlord can trust that their rental guarantee will not have to come into play.
Remember that not effectively sorting out your payments can lead to a tainted rental history, ruining future prospects. One misstep with one landlord can have a domino effect on all future endeavours.
Setting up a direct debit payment shows your prospective landlord how reliable you can be when it comes to the most important factor of a tenancy.
3. Have proof of payments
Even if you do not have a property rental history, there are ways that you can show your future landlord that you are a person who pays on time and regularly. Without a rental history, you may be wondering how to do this.
The good news is that you have probably bought something in your past that required a finance contract. This finance contract can serve as proof of your ability to make regular payments for something.
For example, if you have ever purchased an electrical good, there was most likely some recurring payment that you had to take care of to fully pay it off. This is one step towards proving your financial trustworthiness to your landlord.
If you have any proof like this with a record of regular payments, it will most likely help you rather than hurt you.
4. Show off your income
Lastly, as a first-time renter, providing details of your ‘nonexistent’ rental history does absolutely nothing if it reinforces the idea that you are unreliable and untrustworthy. Do you know what could help?
That’s right, proof of income. Having your employer provide a letter of reference can go a long way.
Any source of income is worthy to be on your rental application since you cannot provide a specific rental history of a property. This includes adding freelance money, monetary gifts, and more like this to your application.
It is important to include anything and everything that proves you are financially adept because property managers use a certain formula to determine if you are. It is called the 30% formula.
To decide if you are able to afford a rental home, they will calculate if you have a regular net income that can support your rent. With a rent of $300 per month, you need to be making at least $1000 per month since that rent is 30% of your net income.
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