How to Find High-Quality Tenants – Rental properties are big investments and if you’re a private owner, they’re your livelihood. You wouldn’t want to trust your livelihood with just anyone, right? Finding the right tenants help you protect your investment. And if you’re considering becoming a landlord for the first time then you’ll want to pay attention to the advice we outline here.
Below are a few tips find the right kind of renters, and keep your property business profitable.
1. Outline your terms
Even good people will try to push their limits – it’s just the name of the game. So, make sure you set boundaries early. A good rental agreement is clear about general expectations, rules, fees, and consequences for rule violations. It’s imperative that every single signed lease contract you draw up clearly states when rent is due, the acceptable forms of payment and delivery methods, and terms for late payment.
Whatever you do, do not make exceptions. Part of finding great tenants is training good tenants to stay that way. It may be helpful to remember that your tenants are your clients, so make sure you maintain a line of professionalism. When you clearly outline your terms and regularly enforce them, you’ll likely find people will be less likely to bend the rules.
When you’re looking for tenants and drafting your lease agreement, remember that you have to uphold your part of the bargain as well. That means properly maintaining the property and responding to emergency fixes. However, if something is simply outdated but doesn’t present a safety issue, you don’t have to immediately remodel – just basic care and maintenance is all that’s necessary. If you do eventually decide to renovate, an update to a property helps increase the property value which, in turn, correlates with how much you can raise the rent.
- Screen applicants properly
Screening your tenants is the most important thing you can do to safeguard yourself from future damage and thousands of lost dollars.
Why? Because the cost of eviction alone can run you upwards of four thousand dollars! Even just having some basic information can help you ascertain whether or not someone would be a good rental candidate. However, more in depth information is much more helpful.
For example, credit and or rental history are incredibly important, as are employment records and criminal history. You can easily find eviction record and eviction screening services by going online. There are a plethora of options to choose from that provide a comprehensive credit breakdown and even a recommendation of whether someone would be a good candidate or not.
We recommend a credit background check by TransUnion to get the best protection against problematic tenants.
- Meet people in person
Similar to online dating, someone who looks great on paper may not seem like such a great catch in person. This is why it’s important you schedule time to meet potential applicants in person. This not only gives you an opportunity to make sure an applicant is who they say they are, but it gives you a chance to ask some questions regarding pets or if they’re planning to live alone or with roommates.
However, you’ll want to be careful about asking questions which could be considered discriminatory. For example, it’s legal for you to ask about the number of occupants since you’re legally responsible for enforcing occupancy regulations. But say you ask an applicant if they have children and choose not to rent to the individual for other reasons you could potentially be sued for discrimination against familial status. So, make sure you know your rental laws.
- Know where to advertise
When you have a vacancy it’s always a rush to fill it. Advertising online is an easy option, but often, there just aren’t the best filters in place. If you live in a nice neighborhood, put a sign up in your yard. You may be surprised, word of mouth is often the best kind of marketing.
Utilize your community to do the heavy lifting by placing ads in local coffee shops, or university centers. Communal work spaces, such as WeWork is another great option, as there are often people who have just moved to the area, or are on business and considering moving to your area and will need a new place to hang their hat. Or, offer incentives to your current tenants who can help by referring family or friends.
- A good defense is the best offense
When you’re searching for the right tenant, it’s important to be thorough. Take the time to check references properly, follow up with the applicant’s employer, and get a full background and credit check.
Not only does a thorough screening process save you time, it also saves you the money and hassle it would involve to resolve rental agreement issues with a troublesome tenant. It’s always better to be safe than sorry – it’s cliché but when it comes to your property and financial well-being, you can never be too cautious.