If you’re a landlord, the efficient management of your investment property depends on one rule: tenant, tenant, and tenant! The repercussions of renting your home to the wrong tenants can be quite serious. Just imagine the hassles of reminding your tenants again and again to pay their rent. And what if they leave your house in a complete mess? Moreover, you may land in legal trouble by renting your property to someone with a criminal record. Considering all such potential troubles, it’s imperative to find good tenants who will take care of your home.
Whether you have one unit or hundreds, it’s crucial to find renters who pay rent on time and take care of the property. Not just this, you also need to avoid the cost of finding new tenants to replace bad ones. As such, to help you find the best tenants, we’ve listed some tips to make this task a bit easier for you. By following these simple tips you can find good tenants without wasting money.
Understand the Laws
Make sure before renting out your property, you understand the federal and state laws that cover tenants and landlords. Some state may have a law regarding illegal discrimination which means you cannot deny tenancy on the basis of race, religion, national origin, gender, age or family status. So, it is essential to follow fair housing laws at the local, state and national level.
Advertising is necessary
As a landlord, you need tenants, but where do you find these tenants? To reach a large number of potential tenants, you need to advertise your rental property. Nowadays, most people search rental home online which means it’s best to advertise your rental home on websites. There are some great websites that charge a nominal fee for listing your property. However, make sure to avoid an unreliable website that doesn’t charge any fee. Some sites are scams and they charge money from potential tenants in your name and then disappear.
Another option is hiring a realtor or real estate agent to get guaranteed results. In exchange for a little commission, these brokers can save you a lot of the hassle and headaches that come with dealing with prospective tenants.
Perform a Background Check
One of the most important tasks is screening potential tenants. No matter how and where you find them, make sure to perform background checks. You may take contact details of their previous landlords and speak to them personally. This will help you know about the tenants. Ask questions about their behavior and timely rent payment. If a tenant is hesitant to provide references, it’s a clear warning sign. In addition to this, you also need to ensure that the person has no criminal records.
Conduct Credit Checks
It’s necessary to conduct credit checks to determine the financial position of the tenant. This will, in turn, tell you if they can be relied on to pay their rent on time. For this, you need to verify the job status and income of the person. You may check the copies of their pay stubs where applicable. Ideally, their income should be 3x as much as the rental cost. In addition to this, consider their income-to-debt ratio because high debt will impact the tenant’s ability to pay rent on time. There are some websites which can perform research an applicant’s employment, credit history, bankruptcies, evictions, and criminal records.