-From the Managing Director Michael Murray
Surry Hills attracts one of the most diverse tenant pools of any suburb in Sydney. Creative professionals, hospitality workers, corporate relocatees, medical staff from nearby hospitals, students, and executives all compete for the same stock. With a vacancy rate of 0.78%, the tightest in inner Sydney, landlords can afford to be selective. But selectivity requires a screening process, not a gut feeling.
After 22 years managing investment properties across the 2010 postcode, here is exactly how I approach tenant selection, and the mistakes I see self-managing landlords make most often.
Start with the property, not the applicant
Before you evaluate a single application, you need to know precisely what tenant profile your property suits. A three-bedroom terrace on a quiet street near Foveaux attracts a different profile to a one-bedroom apartment on Crown Street. The former suits a small professional household or couple seeking stability. The latter attracts short-term workers, hospitality professionals, and creatives who may have irregular income or shorter lease intentions.
Matching the tenant to the property, not just to the price, is the first and most important decision you’ll make. Getting this wrong at the start costs far more than a vacancy period.
Who actually rents in Surry Hills, and what that means for your property
With 51% of Surry Hills residents renting, the suburb has one of the highest renter populations in inner Sydney. But that pool is not uniform. Understanding who rents in Surry Hills, and where, is the foundation of intelligent tenant selection.
Crown Street corridor (Crown St, Bourke St, Fitzroy St)
This is the social spine of Surry Hills. Properties here attract creative professionals, hospitality industry workers, and young executives who want walkability and access to the suburb’s cafe, bar, and restaurant culture. Tenant turnover in this corridor tends to be higher, 12 to 18 months is typical, because this demographic moves frequently as careers develop and income grows. The tenants are often excellent, responsible, well-employed, well-referenced, but landlords should price lease renewals strategically rather than assuming long tenancy.
Foveaux Street and south toward Cleveland
Quieter, more residential, and increasingly attractive to professional couples, small families, and medical or legal professionals working near the CBD or Prince of Wales Hospital precinct. Tenancy lengths here are consistently longer, 18 to 36 months is common in my experience, and tenant profiles tend toward higher income stability. Properties in this zone should be positioned and priced to attract that demographic, not the Crown Street profile. Over-styling or under-pricing for the wrong tenant profile is the most common error I see in this corridor.
Elizabeth Street and the eastern boundary toward Darlinghurst
This zone functions as a transition between Surry Hills and Darlinghurst, and the tenant profile reflects that. Corporate relocatees, interstate arrivals, and executive tenants seeking proximity to the CBD and the Eastern Suburbs account for a significant proportion of applications here. Properties in this corridor that are presented and marketed at the executive level, professional photography, video, premium listing, consistently outperform those that aren’t, both in rent achieved and tenant quality.
The building matters as much as the street
Surry Hills has a significant number of strata buildings with active defect claims, dated common areas, or unresolved maintenance issues that affect how a property presents to applicants. A well-managed strata with recent capital works attracts a different applicant profile to one with known issues, and experienced tenants know how to read a building’s history from the listing and the inspection. Managing in this suburb for over two decades means I know which buildings perform and which ones require a specific marketing approach to attract the right tenant despite those limitations.
The four things I look at in every application
1. Rental history, not just the reference
A reference from a previous landlord or agent is useful, but it’s only one data point. I look at the length of each tenancy. A pattern of 6-8 month tenancies across multiple properties over several years tells me something a glowing reference won’t. Long-term tenancies, 18 months or more, are a stronger signal of a stable, property-respecting tenant than any written reference.
2. Income and employment stability
The standard benchmark is rent at no more than 30% of gross income, but in Surry Hills where rents sit between $800 and $1,500 per week for most stock, I look beyond the number. I want to understand the nature of the income, permanent employment, contract, self-employed, or PAYG, and how stable that income stream has been over the past two years. A high earner in an unstable industry is not automatically a better tenant than a moderate earner in a secure one.
3. The application itself
How an applicant fills in a rental application tells you a great deal about how they will communicate as a tenant. Incomplete fields, missing references, no cover note on a competitive property, or a delay in submitting documents are all signals. The best tenants in Surry Hills treat the application process as seriously as the landlord does, they come prepared, they respond quickly, and they provide complete documentation without being chased.
4. The inspection
At every open inspection I watch how applicants move through the property. How they handle doors, whether they check windows, how they speak about the space. A prospective tenant who treats an inspection carelessly will treat the property carelessly. It sounds simple, but it is one of the most reliable signals available before a lease is signed.
The mistakes self-managing landlords make most often
Choosing the first applicant to avoid vacancy
A one-week vacancy at $1,200 per week costs $1,200. A problematic tenancy, late payments, damage, a tribunal dispute, can cost $10,000 or more in lost rent, repairs, and legal fees. Patience in selection is one of the highest-return decisions a landlord can make.
Skipping employment verification
A payslip is not employment verification. I call employers directly. For self-employed applicants, I request two years of tax returns, not just the most recent. This step alone has prevented several tenancies that would have become disputes within three months.
Relying on a single reference
One reference is one perspective. I always request two, and I always call both. The difference between how a previous landlord describes a tenant in writing versus on the phone is frequently illuminating.
What NSW tenancy law allows, and what it doesn’t
Tenant selection in NSW operates within a legal framework that many self-managing landlords are unaware of until something goes wrong. Under the Residential Tenancies Act 2010 (NSW), there are strict limits on the information a landlord or agent can request, use, or rely on in the selection process.
You cannot discriminate against an applicant on the basis of race, sex, pregnancy, marital or domestic status, disability, age, sexual orientation, or religion under the Anti-Discrimination Act 1977 (NSW). This applies equally to landlords and agents, and a refusal that appears neutral on the surface can still constitute unlawful discrimination if the effect is discriminatory.
You can request a completed application form, proof of identity, evidence of income, and rental references. You cannot request a credit check without the applicant’s written consent, and you cannot retain application documents beyond the period required to assess the application.
If two equally qualified applicants apply simultaneously, there is no legal requirement to select on a first-come-first-served basis, selection must be on legitimate grounds related to the tenancy, not personal preference. Keeping a written record of your selection rationale is not legally required but is strongly advisable, particularly if a rejected applicant later raises a discrimination complaint.
Bond in NSW is capped at four weeks rent for most residential properties. Any arrangement requesting more than the prescribed bond amount is unenforceable and exposes the landlord to a complaint with NSW Fair Trading.
Understanding this framework doesn’t complicate the selection process, it clarifies it. When selection is based on verifiable, documented criteria applied consistently to every application, it is both legally defensible and practically superior.
What the right tenant looks like in practice
The best tenancies I have managed in Surry Hills share a consistent profile: tenants who treated the application seriously, had stable income and clean rental history, communicated proactively during the tenancy, and left the property in the same condition they found it. In several cases, those tenancies have run for four or five years, extraordinary by inner Sydney standards.
Working with a specialist matters
Self-managing a Surry Hills investment property is possible. But the tenant pool is large, the applications are numerous, and the screening process takes time that most landlords don’t have. My role is to manage that process on your behalf, applying the same screening rigour to every application, every time, without shortcuts.
If you own an investment property in Surry Hills or Darlinghurst and want to understand what your property should be achieving, and what kind of tenant it should be attracting, I offer a free rental appraisal with no obligation.