Why High-Quality Tenants Are Your Best Investment Strategy in 2025
In 2025, landlords are facing more pressure than ever, with rising insurance premiums, stricter tenancy laws, and a growing number of rent disputes. Amid all this, one factor can still make or break your investment returns: the quality of your tenant.
Good tenants don’t just pay rent on time. They protect your property, reduce costly turnover, and minimise legal risk. And with vacancy rates still near record lows, landlords have more applicants to choose from — but that doesn't mean they should rush.
Why This Matters More in 2025
Across Australia, property investors are dealing with a new level of complexity. Here's what has changed:
- Insurance policies have tightened. Many landlord policies no longer cover rent default unless strict conditions are met.
- Tenancy legislation has evolved, with changes in pet laws, minimum housing standards, and bond release timeframes in multiple states.
- Tribunal cases are rising. In NSW alone, the number of tenancy-related hearings is up 14% year-on-year.
- Repair and maintenance costs have climbed, driven by inflation and material shortages.
With yields climbing, it’s tempting to push rents up and fill vacancies quickly. But accepting the wrong tenant can cost far more than a few weeks of vacancy.
The Real Cost of a Bad Tenant
Let’s break it down:
| Issue | Estimated Cost |
|---|---|
| Rent arrears and legal recovery | $2,000–$5,000+ |
| Property damage | $1,500–$10,000 |
| Vacancy during tribunal resolution | $1,000–$3,000 |
| Lost rent during re-letting | $500–$1,500 |
And that’s not including the stress, time, and impact on your insurance excess or premium.
By contrast, a good tenant might stay for 3 to 5 years, take care of the home, and save you thousands in re-letting and repair costs.
How to Attract and Retain High-Quality Tenants
In a competitive rental market, the best tenants are still selective. To attract them, landlords need to:
- Present the property well, with clean finishes and functional appliances
- Respond to maintenance promptly
- Offer fair rent, aligned with market value and condition
- Be consistent and professional, often through an experienced property manager
It’s also crucial to have thorough screening processes that go beyond checking payslips. Rental history, references, and behavioural insights matter more than ever.
Your Property Manager Should Be Your First Line of Defence
At Club Property Management, we go beyond ticking boxes. We screen tenants thoroughly, monitor rent payments in real time, and keep landlords updated with any risk indicators. In a world of increasing legislation and insurance exclusions, we help protect your income, not just your property.
Want to know if your property is tenant-proofed? Email leasing@clubpropertymanagement.com.au for a free rental health check or to learn how we’re helping landlords stay ahead in 2025.
Sources
- SQM Research Weekly Vacancy Rates, July 2025
- Tenants' Union of NSW Tribunal Case Trends, 2025
- Domain Rental Report, June 2025
- Insurance Council of Australia Policy Changes 2025