How do you know if a renter is reliable?, How do you find the perfect renter?
Finding good tenants for your rental property is important if you want to maximize the returns from your property. A good tenant will ensure timely rent payments and minimum wear and tear to the property.
Learning how to find renters and especially good renters requires experience and patience. Hence, if you are also one of the many landlords looking for decent tenants, then read on. The following sections describe in detail the qualities that a good tenant should have.
Why Is It Important to Find Good Tenants?
Like any investor a landlord also wants quick returns from his investment which in this case is a real estate property. After much thought he decides a rental amount that will cover his expenses and also help him make a little profit.
Sometimes, in a hurry to get that rental amount, landlords give their property to the first person who is willing to pay the rent without screening potential tenants properly. And this haste can become very costly at times.
Bad tenants who do not pay rent on time and damage the property add to the cost of investment and can turn your real estate investment into a loss in the long term.
So, how to pick a good tenant?
How to Find Good Tenants?
Selecting a tenant who will prove to be a good renter in the long term requires some methodical checking of documents, making calls to verify information and setting up face to face meetings.
You can either make use of some tenant placement services to do all this work or you can decide to do all this yourself.
Finding tenants without an agent requires some hard work but it is more economical and gives you the satisfaction of knowing your renter first hand.
Listed below are some of things you should keep in mind when choosing between two tenants.
Your Choice Should Not Be Discriminatory
First and foremost, make sure that in your quest to find good tenants you are not being unfair. You cannot discriminate on the basis of color, caste, creed, race, physical abilities and so on.
There are rules in every country and state that ensure that prospective renters are judged equally and without any bias. For example, you also cannot reject a renter on the basis of number of children he/she has.
Ensure the Prospective Renter’s Ability to Pay Rent on Time
One of the basic qualities’ landlords look for in a tenant is his or her ability to pay the rent on time.
Multiply the monthly rental amount with 2.5/3. The resultant figure should be the minimum monthly salary of your prospective tenant. It is the rule of thumb which is applied while screening tenants.
But, just having the right monthly salary figure does not make a person the right candidate. You will need to conduct credit score checks too.
A credit score check will let you know about the debt payment habits of the person. You will get to know how many outstanding loans he/she has, whether they pay their bills on time or not and so on.
A person with high salary figure but a bad credit score is definitely not a good choice. Like they have failed to pay other debts they might fail to pay your rent also.
Another check that you should do at this stage is to verify employer details. Call the prospective renter’s employer and find out about the following things:
- Nature of the job, whether it is permanent or temporary
- Number of years the person has been employed
- Behavior with colleagues
You may or may not get all the information from the employer. It will be wise to get salary receipts from the prospective tenant in order to verify his income details.
Tips to Avoid Dodgy Tenants
There are various types of tenants, like the complainer type, messy type, aggressive type, destroyer type and so on. These type of dodgy tenants or unreliable tenants are constant headache for landlords.
They will ignore your calls, will come late for meetings with you, will disturb neighbors, constantly complain, will not keep the property clean and so on.
In order to find good tenants and avoid such bad ones, follow the given below tips:
- Create an application form and make each prospective tenant fill it.
- Verify the information filled in the form like id details, contact numbers.
- Call previous landlords to know past tenancy history.
Dishonest people might provide you with fake numbers of their friends and relatives. To avoid getting into this trap always ask for landline numbers. When you make the calls, counter check the information given by the applicant like; number of years of tenancy, reason for moving out, relations with neighbors and so on.
- Do a criminal history background check.
Conduct a Face to Face Interview
Landlords looking for tenants should never take decisions based upon a person’s on-paper image. Make sure to meet the prospective tenant at least a couple of times before you decide to choose him.
There are many things that you can learn about a person from their appearance, dressing sense, non-verbal gestures and other body language. Trust your instinct here.
Wrap Up – Tips to Finding Good Tenants
Finding good tenants for your property can be a time-consuming affair. If you find the whole process too demanding upon your time then you can also outsource some of the work to good tenant finder agencies.
For example, you can perform employer and landlords checks and ask the agency to do the credit score and criminal history check.
It is not too difficult to find good tenants, just do thorough checks and trust your instincts. Remember the hard work you do now, will not only pay you off in the form of good monetary returns but in the form of your mental peace too.