This article is general information only and does not constitute financial or tax advice. Consult a qualified tax professional for advice specific to your situation.
Key takeaways
- A good benchmark is that an applicant's gross household income should be at least three times the annual rent.
- Always call previous landlords directly and ask: "Would you rent to them again?"
- Tenancy databases like TICA and NTD can reveal unpaid rent, property damage, or abandonment for a small per-search fee.
- You can refuse tenants based on rental history and ability to pay, but never on protected attributes like race, family status, or disability.
- Red flags include applicants who push to skip the application process or offer large upfront payments to bypass screening.
Choosing a tenant is the single most important decision you will make for each property. Good tenant screening takes time, but the payoff is enormous. Get it right and the next 12 months mostly take care of themselves. Get it wrong and you are dealing with late rent, difficult conversations, and potentially a tribunal hearing. Taking an extra few days to screen applicants properly is almost always worth it.
What to Look for in a Rental Application
A solid application tells a clear story: the applicant can afford your property, they have a stable situation, and they have a track record of looking after rental homes.
Income relative to rent. A common benchmark is that an applicant's gross household income should be at least three times the annual rent. On a property renting for $500 a week ($26,000 a year), you are looking for combined household income of around $78,000 or more. This is a guide, not a hard rule (someone with significant savings and lower income can still be a low-risk tenant) but it is a sensible starting point.
Employment stability. A permanent employee with two or more years at the same job is lower risk than someone who started a new casual role three weeks ago. That does not mean you should reject casual workers or the self-employed, but you should ask for more supporting documentation: payslips covering at least three months, a tax return, or a letter from an employer confirming the arrangement.
Rental history. Has the applicant rented before? Did they pay on time? Did they leave the previous property in good condition? Someone with a solid rental history is telling you a lot about how they will treat your property. Someone who cannot provide any rental references, or who has a gap in their history they cannot explain, warrants more questions.
Checking References Properly
Reference checking is where many landlords take a shortcut, and where a lot of avoidable problems start.
When calling a previous landlord, ask directly: did the tenant pay rent on time? Were there any breaches of the tenancy? Would you rent to them again? That last question cuts through polite non-answers. A previous landlord who pauses or qualifies their response is telling you something.
For an employment reference, confirm that the applicant actually works there, in the role they described, with the income they listed. You do not need to ask detailed personal questions; you are just verifying the basics of what they told you.
Be sceptical of references that only go to a mobile number, or where the "previous landlord" turns out to be a family member or friend. Ask for an address to confirm the property was a genuine rental.
Tenancy Databases
Australia has several tenancy databases (sometimes called blacklists) where landlords can list tenants who have breached a tenancy agreement. The main ones are TICA (Tenancy Information Centre Australasia) and NTD (National Tenancy Database).
Checking these databases can reveal whether an applicant has a prior listing for unpaid rent, property damage, or abandonment. You generally need to pay a fee for each search, but for a 12-month tenancy it is a reasonable investment.
Be aware that listing rules are regulated by tenancy legislation in each state. For state-specific details, see our NSW landlord guide, Victoria guide, or Queensland guide. You cannot list a tenant without proper grounds, and tenants have the right to dispute incorrect or outdated listings. If you find a listing for an applicant, give them the chance to explain, as sometimes entries are old or the result of a dispute that went both ways.
Credit Checks
A credit check is not a substitute for a tenancy database search, but it adds useful context. It can reveal whether an applicant has defaults on utilities, phone accounts, or other financial products, patterns that can indicate how someone manages their financial commitments more broadly.
Several services allow landlords to run credit checks with the applicant's consent, which you must obtain in writing before running one. If an applicant refuses to consent, that in itself is worth noting.
Red Flags Worth Taking Seriously
Most rental applications are straightforward. But some patterns are worth pausing on: an applicant who cannot explain a gap in their rental history, one who pushes hard to skip the standard application process, or someone who offers several months' rent upfront as a way of bypassing normal screening. Genuine applicants in good standing do not usually need to use pressure or shortcuts to secure a property.
An applicant who speaks poorly of every previous landlord, or who dismisses requests for references as unnecessary, is also telling you something about how they approach tenancy obligations.
Anti-Discrimination Laws
You have the right to choose your tenant based on their ability to pay the rent and their rental history. You do not have the right to refuse an application based on race, sex, gender identity, sexuality, pregnancy, family status, disability, age, religion, or a range of other protected attributes under Commonwealth and state anti-discrimination laws.
In practical terms: assess every application on the same criteria. Document your decisions. If the most financially qualified applicant with the best rental history happens to have children, you cannot simply choose a less qualified applicant ahead of them because you prefer no children in the property. The fair thing and the legal thing are, in this case, the same thing.
Conducting Viewings
A viewing is not just a chance for applicants to assess the property; it is a chance for you to make an early assessment of them. People who arrive on time, ask considered questions about the property, and treat the inspection respectfully are demonstrating something about themselves.
Take note of how many people attend the viewing relative to how many names are on the application. If three adults come through together but only one is listed as an applicant, ask the question directly.
Making Your Decision
When you have a shortlist, go back to the basics: who can clearly afford the rent, who has a stable situation, and who has a clean rental history backed up by a willing reference from a previous landlord? Those three factors together are a better predictor of a good tenancy than any single piece of information.
If two applicants are close, trust your instincts, but make sure your instincts are based on the rental record and financial position, not on personal characteristics that have nothing to do with their ability to be a good tenant.
Once you have made a decision, move quickly. Good tenants have options, and a delay of more than a day or two can cost you the applicant you wanted. For tips on keeping them once they are settled, see our guide on how to keep good tenants long-term.
For what comes after you approve a tenant (lease agreements, bond lodgement, and managing the ongoing tenancy) see our guide to managing tenants and leases in Australia. And if things do go wrong down the track, our guide to dealing with problem tenants covers your options step by step.
Keeping Your Records Organised
Good screening takes time, but the records it produces are worth keeping. Notes on why you chose an applicant, and why you did not choose others, protect you if a decision is ever questioned.
propkt lets you track each tenancy from the moment it starts: the lease agreement dates, the bond amount, the agreed rent. When it comes to staying on top of rent payments and knowing your financial position across each property, having everything in one place means you are never scrambling. Your first property is free, so give propkt a try.