After investing in a rental property, you want to be sure that those renting will cherish your investment. By creating a list of qualities to look for in a tenant, you can avoid costly evictions, non-payments, and potential damage to your property. So we’ve created a list for you, these are 8 things you should inquire about when fishing for a good tenant.
Once you’ve been able to find good tenants for your rental property, it’s important to keep them for as long as possible to minimize vacancy and maximize return.
Watch our video below to figure our how to keep your tenants happy so that they stay at your investment property:
8 Factors That Make for a Good Tenant
1. Good Credit
First and foremost, you want to choose a tenant with good credit. Having a high credit score indicates they must be financially responsible, so you know they will pay their rent on time. During the application process, run a credit check to see if they have a history of paying their bills on time. You can use online services such as Tenant Verification or TenaCheck, to screen tenants and check an applicant’s credit score.
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. A potential renter that has low debt but does not have an income three times the rent may have a greater guarantee of making full, on-time rental payments in that case.
3. Criminal Background… The Lack of…
Checking the criminal history is vital when looking for a good tenant. In order to check on criminal information, you need the tenant’s name and date of birth. Be sure to check the potential tenant’s ID to ensure the information they are providing is accurate. Criminal information is a public record; however, since there is no nationwide database for criminal records, it may be easier to hire a tenant screening company to search the criminal databases in your state and across the country.
Related: Five Things You May Not Know About Becoming A Landlord
Stability is a good indicator as to whether or not a tenant will be reliable in making on-time rental payments and being a long-term leaseholder. By looking at past rental and job history, you can see whether or not the tenant has a stable life and income. Moving several times or being inconsistent with employment in a short period of time may raise a red flag. A good tenant has a steady life.
5. Good Rental History
Rental history allows you to get a glimpse on whether the individual made a good tenant in the past. Ask for information on where they are relocating from and why they are moving. You can also ask for contact information to speak to at least two of the tenant’s previous landlords. 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. Ask landlords questions such as if their rent was on time, if they gave at least 30 days notice prior to relocating, and if they maintained the property.
One of the best ways to tell if an individual makes a good tenant is if they are respectful. Not only does a good tenant pay the rent and other bills on time, but they take care of maintenance issues that are their responsibility. If they respect you as a landlord, they will alert you if something needs your attention. You can indicate if they are respectful tenants by asking their past landlords if and how they cared for the property. Did they cause damage? Were there complaints from neighbors? A tenant that is not respectful will likely try to take advantage of you by making late rental payments, coming up with excuses about damages, or simply neglecting the property. You can tell whether they respect you by how professional they are when they reached out to you regarding the property. Did they arrive on time to tour the property? Were they helpful during the application process? Remember, a respectful tenant will shine through in the future as a good tenant.
Related: Owning a Rental Property: Hearing From an Investor
A good tenant is an honest tenant that does not lie about making rent, their employment status, and any damages that have occurred during their time as a lessee. During the application process, test the honesty of a potential tenant by verifying the information on their application. Call their past landlords and employers and check their ID to verify information.
Having your money invested in a residential property means that maintenance is key. A good tenant will help protect your investment by taking care of the property and keeping it clean. The bigger the mess the tenant makes while renting, the more you will have to deal with when they move out. One way to check if a tenant is clean is drop by their home unexpectedly or walk them out to their car and take a look. You definitely want to ask their previous landlords about the condition of the property during and after the tenant’s lease.
As you are searching for a good tenant, be sure to refer to the laws and regulations regarding tenants and landlords. 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. Staying true to the application process will help you avoid a loss on your investment property.
Let the searching for a good tenant begin!
Related: 8 Steps to Becoming a Landlord