A good landlord will go to great lengths to find a qualified renter for their property. That’s because qualified tenants are those with a proven track record. While no screening method is foolproof, there are certain factors you should look at that will give you a better chance. While it may take a little time and patience, it’s worth putting the right tenant in your rental property. It is imperative to make sure to apply your rental application criteria equally to all applicants.
A good tenant will often minimize property wear and tear, and look after the property and landscape as if it were their own. They are extremely valuable to both the property owner and the property manager looking after the rental on the owner’s behalf. However, some tenants can be a nightmare, they can pay their rent late, cause destruction to the landlord’s property, havoc with the neighbors, and demand unreasonable and endless expensive repairs. A terrible tenant can cause problems for the length of a lease months before you can get them out of the property easily, so it’s essential to avoid renting to them if you can.
How to Choose Your Prospective Tenant?
Of course, it’s not ideal to just let someone live on your property. Tenant quality should be prioritized as it will determine whether your rental property business will flop or succeed. Below are a few steps on how to choose a prospective tenant:
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Prepare the Rental Criteria
For every choice that we will make, there will always be some standards that we consider before dropping that decision. The same thing goes for choosing the right tenant for your rental property. We want to protect our property but not close off enough to scare away any potential tenant. As the property owner, it is important for you to visualize the qualities your tenant should have. It will be helpful to create a checklist for it. Below is an example of what your ‘criteria for judging’ should contain:
- Is the prospective tenant employed?
- Does the prospective tenant have enough income to pay rent?
- Does the prospective tenant have a history of paying rent on time?
- Is the prospective tenant friendly and easy-going?
These are just a few but you can add more depending on your lifestyle requirements and preferences. How much is your required income per month? Will you accept pets? Is smoking prohibited? A rental criteria checklist will help you narrow down your minimum requirements as a landlord ranging from rental history and background checks to pet and parking policies.
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Advertise Right in the Right Places
After having a clearer view of your potential tenants’ qualities, it’s time to put that rental property up on the market. While flyers and posters could still be helpful, posting an ad online will save you more time and effort. In this technological age, almost everything can be found online, so your next renter can be found online too. Now, it is important to not just put up your rental ad in random places on the internet.
You should place your ads on websites or social media sites related to your market to attract more renters. Placing your ad in the wrong places might bring you wrong or bad tenants that may potentially harm your business and your pocket. Be specific with the details that you will include in your ads. Aside from the rental price, provide other necessary information such as the location, lot and floor size, number of bedrooms and bathrooms, if it has a garage, and so on. Don’t forget to add the striking amenities and features that will help you pull in great and reliable tenants. State the benefits of moving into your property.
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Do a Thorough Tenant Screening Process
After placing your ads online, or sharing flyers, it is expected that an interested person will reach out to you. But before you allow a complete stranger to occupy your property, you need to scrutinize him first. This is where your prepared criteria come in handy. A great tenant should possess all, if not the majority, of the qualities you had listed down on your criteria. And conducting a tenant screening is the perfect method do it.
Aside from the criteria, you prepared beforehand, you can also ask these questions: Does he have sufficient income to sustain the rent payments throughout the lease term? Does he pass your criminal background check? Does he have any records of property damage in the past? Did he illegally break any rental agreements in the past? Most important of all, take a peek into your prospective tenant’s rental history to know if he has a solid performance in paying bills on time. Asking for a tenant credit report also helps. Know their debt and income ratio. Make sure your tenant doesn’t have any outstanding credit balance and has a commendable credit history.
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Contact Previous Landlords
As a part of your tenant screening, one of your tasks is to contact his previous landlords if you can. Verify if your applicant had really rented out to them in the past, was able to give rent payments on time, was able to create a good landlord-tenant relationship with them, isn’t a disruptive neighbor, and left the rental property in good shape and condition. This way, you’ll have an idea of how your potential tenant will treat and handle your property. Aside from talking to their previous landlords, you can also make a quick call to their employers for some income verification. A good way to verify income is to directly speak to his employers to know the details firsthand.
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Create a detailed Rental Application
It is crucial to gather accurate and thorough information on potential renters to properly determine if they’re right for your property. A rental property application should include information on the prospective tenants, their financial and employment history, and their rental history. It can also indicate your preference for smoking, pets if you allow a co-signer, requirements for references, and other questions you may have to make an informed decision. However, if you choose to receive applications, make sure it is complete and filled out honestly with no incomplete or false information.
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Check potential tenants’ references
These calls or emails are crucial to confirming information, establishing trustworthiness, and gaining a better understanding of the character of the prospective tenant. As a landlord, consider reaching out to previous landlords, employers, and personal contacts to gain a more comprehensive understanding of a potential tenant’s suitability. A little extra work in checking references can save you countless hours trying to get rid of a bad tenant later on.
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Run a Background Check
Tell applicants upfront that you require a background check as a part of the application process. This check gives you a better and bigger picture of the applicant. You can also use it to compare the accuracy and honesty of the applicant on their application form. Certain crimes may be a red flag that you don’t want them as a tenant. In addition to a criminal background check, you can also run a credit check. A credit score gives you a snapshot; the report gives you the full picture.
QUALITIES OF A GOOD TENANT
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A Stable Income
In order to pay rent on time, a good tenant must have a steady income. You can verify income by asking for copies of their pay stubs. Ideally, a tenant’s monthly income is roughly three times the monthly rent. However, even if their income is three times the rent, you have to factor in any debt they have. While running a credit check, look for the debt they have accumulated. A high amount of debt indicates the tenant may have other costly bills to worry about each month, potentially making it difficult to make full, on-time rent payments to you.
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Good Rental History
Rental history allows you to get a glimpse of whether the individual made a good tenant in the past. Ask for information on where they are relocating from and why they are moving. Make sure you reach out to more than one landlord to get the complete picture. You should ask if they know why the person is moving elsewhere, if they had any issues with their neighbors, if they paid their rent on time, and if they gave notice prior to moving out. It is important to speak to at least two landlords because the most recent one may falsify information in order to get the tenant out of their current location.
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A Good Credit Score
Check the credit score of potential tenants before allowing them to move into the property. A good credit score indicates that they’re financially stable and clear their dues on time. So, it’s more likely that they won’t delay the payment of the house rent. A credit report contains information about what lines of credit a prospective renter has opened and how they have treated these debts in the past. If a potential tenant has been responsible for paying off debts, it indicates their capacity to pay rent fully and on time.
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Clean Criminal Record
Checking the criminal history is vital when looking for a good tenant. Money doesn’t tell the whole story. If somebody offers to pay the full first year in cash but can’t provide a pay stub, that’s more than a little suspicious. You have a responsibility to protect your renters from criminal activity, and renting to people with a history of violent crime is a huge liability. A great tenant won’t give you anything to worry about in this regard.
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No Prior Evictions
Nobody evicts a reliable renter. Extenuating circumstances might make somebody passable, but an eviction means a landlord went all the way to court just to free up the property. Eviction history and past payment problems can also be great predictors of future eviction. It is important to speak with previous property managers so as to be sure of the prospective tenant’s eviction history.
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Honesty
An ideal tenant is honest and doesn’t take advantage of the leniency of the landlord. Even if they’re unable to pay the rent, they’ll notify you in advance. Tenants who tell you the truth up front no matter the situation can often lead to great relationships. If you find out your potential tenant has lied about anything during the screening process, this should be a huge red flag. This is why screening and verifying references and the information provided by the tenant is so important. Furthermore, if they damage the property, they’ll confess their mistake and agree to pay for the repairs.
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Respectful Behavior
A good tenant is respectful towards the landlords. So, evaluate the behavior of potential tenants when interviewing them. If they respect you, they’re more likely to pay the rent as per the rental agreement. Respect isn’t just limited to how he treats you. If the tenant isn’t respectful, he may abuse the property by doing things like slamming doors or letting his children color on the walls. Or, he may simply neglect the property because he doesn’t respect you enough to care. On the other hand, a disrespectful tenant won’t only create problems for you, but they may also disturb the neighbors.
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Cleanliness
A good tenant takes good care of the rented property and keeps it clean. They won’t leave clutter indoors or throw junk in the backyard. Debris and filth tend to attract pests and insects that carry along many diseases. When meeting potential tenants, it is important to consider their appearance. If they’re well-dressed, it’s more likely that they prefer living in a clean environment. Furthermore, if you get the opportunity to meet potential tenants at their current residences, it’ll be even easier to determine their lifestyle.
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Good Communication
Good quality landlords look for in tenants the ability to communicate. Landlords have said that during the screening procedure, a good question to ask is how the tenant has dealt with repair issues or communicated general concerns about the rental property. This will give you a good idea about their communication skills which will usually lead to how they will communicate with you about your property.
- Trustworthiness
Considering you will entrust your property to a tenant who you do not personally know, it’s important to build a solid relationship with them. If you find a prospective tenant lying or giving elusive answers during the application process, you should see this as a red flag. Make sure you ask questions to test if the applicant is trustworthy.
CONCLUSION
Finding good quality tenants is an important part of your property leasing. Not taking the proper caution and time to find them can result in renting to a bad tenant which only leads to drained resources and headaches. Although finding a good tenant is important, it needs to be done in a nondiscriminatory manner. Use a potential renter’s application as your line of defense for weeding out undesirable tenants.
There’s no one way to know if you have found the ideal renter, but these qualities can be good indicators. Take the time to review all application materials, dive into their personal and financial background, and pay attention to mannerisms and character traits; you’ll find a great tenant in no time.
As informed investors we should understand the risks associated with real estate investing and that there is no guarantee. Please do your due diligence.
