Tips for Finding Good Tenants for Your Property as a Landlordby Rayanne M. Writer
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Buying rental property presents a lucrative opportunity by creating a steady source of passive income. However, that influx of capital can be easily interrupted if you rent to the wrong tenants. There are plenty of ways a tenant can be a bad risk, including falling behind on payments, causing frequent property damage, or posing a nuisance to other tenants in the building. These tips can help you reduce the likelihood of renting to someone who is a bad risk.
Ensure They Can Pay
There are a couple different ways you can ensure a prospective tenant can pay their rent each month. The easiest way is to verify their income by requesting contact information from their employers, copies of recent pay stubs, and the previous month's bank statements. This will help you verify they have been consistently working and that they are still employed. A slightly more complicated method is to verify each applicant's credit score to make sure they meet your criteria. There are plenty of services online that will run credit checks on applicants for you at a small fee. This will help you verify their score and help you find out more about their debt repayment histories.
Look For Someone With a Stable History
The sign of an unreliable tenant is someone who has lived in several places within a year or two. Similarly, look at their work history to see how long each applicant has been with their present employer. Someone who moves around frequently and changes jobs often isn't likely to be a reliable tenant. Your goal is to approve an applicant who will stay in the rental unit for a year or longer, and an applicant's recent history can help you predict how likely they are to stick around. The occasional job change or moving to a larger unit is perfectly acceptable, but you should avoid tenants who make a habit of uprooting their lives.
Conduct a Background Check
Before you conduct a tenant criminal background check, you should consult an attorney who can tell you how the law affects your ability to reject an applicant with a criminal record. If this is considered discrimination in your state, you may still be able to reject a tenant with a history of drug crimes or violent crimes on the basis that they pose a threat to others in the community. Additionally, you should be aware that it will be more difficult to conduct a check on an applicant who has a history of moving between various states. Since there is no national database of criminal records, you may have to conduct a different search for each state in which the applicant has lived.
Ask For Personal References
Each applicant is only going to provide you with the references that they know will represent them in the best possible light. While this means getting a biased impression of the individual, it will help you to establish the personality and trustworthiness of the applicant. Someone who can provide you with several references will usually be more reliable than someone who can only get one or two people to vouch for them.
Trust Your Own Intuition
At some point, you may have narrowed your choices down to two or three potential tenants. When everything else seems relatively similar between them, you should follow your own common sense and gut instincts. If you feel uncertain or uneasy about a candidate, you should feel free to reject them. Alternatively, if you feel good about a tenant and their qualifications are a little subpar, it sometimes pays to go with your intuition. No matter how you make the final decision, errors in judgment are bound to happen. Instead of feeling guilt, learn something from the experience to help you refine your next tenant search. In time, you'll develop a refined strategy for choosing candidates who will treat you and your property with respect.
By taking the time to research each applicant, you can select the tenant who will be the best risk for you. Since an empty unit means a prolonged reduction in the income you earn from your property, you'll want to choose a tenant who will make timely rental payments and maintain residence in the unit for an extended period. Fulfilling these conditions will help you get the most out of your rental property.
Created on Mar 9th 2021 17:29. Viewed 49 times.