Finding the right tenants for your rental property makes your rental business more manageable and successful. As a landlord, your rental property is a business venture. To protect your investment, you have to keep your premises occupied and get continuous cash flow.
To have a stable cash flow, you might be tempted to rent the property without regard for tenant quality. Unreliable and problematic tenants interrupt your cash flow, cost you tons of money and time, threatens your business sustainability, or even kill your bottom-line.
Recognizing the quality of a good tenant is a skill of an experienced landlord. If you’ve already determined your potential tenant, you can request him/her to sign the rental and lease agreement via our site for faster and secure e-signatures.
If you’re still looking for one, here are some proven tips on finding a suitable tenant for a rental property in this article.
What is a good tenant?
There are good tenants, and there’re bad tenants. Finding a good tenant keeps your revenue flowing and your overhead looked after. It’s a business decision based on objective facts against subjective opinions.
When looking for a good tenant, check out for the following qualities in applicants:
- Stable incomes
- Positive credit score
- Healthy rent payment history
- A good reference from the previous landlord
- No prior history of eviction
- The capacity to compensate potential property damage with an upfront security deposit
- No prior criminal record of lewd or violent behavior
- Polite and respectful to neighbors
Having that in mind, use the following tips offered by real estate experts to find an excellent tenant to fill your vacant rental property.
Prepare and Do Research
Firstly, it’s crucial to do thorough research to understand advertisement regulations and the tenant’s selection process. Familiarize yourself with federal, state, and local housing and tenancy law that may apply to you. The Federal Fair Housing Act prohibits discrimination against rental applicants based on:
- Race or color
- Familial status
However, there’re several valid reasons for rejecting an applicant, including financial reasons like insufficient income.
Speaking of the law, you need to prepare a lease agreement before accepting any potential applicant. Lease rental agreement varies from state to state. If you’re wondering, where can I get a lease agreement? Check our website, which has multiple templates for different types of lease rental agreements.
To attract the very best tenants starts with having a great property. A clean and good shape rental property helps set standards for the condition a tenant is expected to maintain and leave the property post tenancy. Upgrade your property by repairing leakages, limescale on faucets and apply a lick of paint.
Evaluate neighborhood income level in the location of your rental property to help you determine rent fees and maximize your profits as well as attract suitable applicants. If you set your price above standard market value, you’ll deter good potential tenants.
Invest in Marketing
Get your property in front of as many relevant and interested parties as possible. Luckily, online advertising makes your work easier, thanks to its ability to reach many potential renters, reliability, and relatively low cost.
You can use a variety of websites to list your rental property and keep your online listing current. Some of the most popular sites include Craigslist, Radpad, Trulia, Zillow, etc. You might also consider creating a virtual tour to showcase your property and its amenities.
Set Expectations Earlier
A well-executed advertisement could generate various potential renters that may not fit the criteria. Set rational tenant qualification standards and expectations upfront within the property listings. Examples include:
- Maximum number of tenants in a room
- The minimum length to occupy the rental property
- If pets are allowed
- No smoking in the unit rule
- Minimum household yearly income of $60,000
- No previous evictions
- A credit score of +700
The above information makes it clear what type of applicants you’ll generally rule out. Use the initial contact to collect information on the applicant and set expectations beforehand. Here are some of the necessary information to ask:
- Why are you looking to move?
- Do you have a current job?
- How long have you worked there?
- When do you want to move in?
- How many individuals are going to occupy the unit and their names and contacts?
- Do you smoke?
- Do you have any pets?
Once you’re done with evaluations, narrow down the list of potential tenants using pre-established criteria.
Do Background checks
If they pass the above criteria, the final step is to run a tenant screening report. This step will help you determine their rental history, criminal background, employment history, and credit check. Reviewing a tenant credit report enables you to evaluate the applicant’s level of creditworthiness.
Look at the tenant’s prior employment history. Do they move or switch jobs often? The stability of tenant employment may prove the ability to afford the apartment. You can determine if the applicant’s income requires more verifications with income insights and get a clear view of their ability to pay rent on time.
Analyze rental history by conducting a landlord reference check. Ask at least two of the tenants’ previous landlords for a comprehensive report and confirm an eviction history. Evicted tenants are three times more likely to be evicted again.
Lastly, perform a thorough criminal background check by visiting various courthouses. It’s vital to hire a reputable screening company to conduct the inspection, saving you time and headache.
You may find both serious and minor offenses; it’s up to you to decide which ones are acceptable. However, certain states prohibit discriminating against tenants with certain criminal convictions. Check your state law before justifying a rejection.
Working as a landlord is a never-ending responsibility. From managing bills to collecting rent to cleaning out properties- the list is endless no matter how efficiently you work. Your work becomes even more complicated if you have to deal with problematic tenants. On that note finding suitable tenants to occupy your rental property becomes crucial.