Renting is a lucrative business but it comes with its problems. Landlords or real estate agents should definitely prepare to meet non-paying tenants, those who cause property damage, and others who are keen on noise violations. Although there is no foolproof method in avoiding these kinds of tenants, there are things you can do to reduce the chances of ending up with them. Here are tips that landlords can use to find the perfect tenant.
1. Get as Much Exposure as Possible
One way you can attract a good tenant is to get a lot of exposure for your rental property. You can easily market your property on platforms such as hotpad and Craigslist. However, an estate agent can help you gain a lot more exposure for your property. The agent will list your home on the multiple listing services (MLS). The real estate agent will also give you valuable advice on marketing your property. He or she can also review your rental applications and help you in negotiating an excellent lease term.
If you insist on going at it alone, there are websites that have relevant information for landlords who want to research more about renting. Check this one as an example.
2. Take a Substantial Deposit
Deposits protect you from damages. Make sure that you negotiate for a deposit that can cushion you in case a tenant damages your rental property. Just check for the maximum deposit allowed in the state you are renting out your property. Once you do not charge more than that, you are okay.
3. Check Your Potential Tenants’ Background and Credit History
Making background and credit checks can also help you to identify the best tenants. You will know the kind of person you are dealing with through these checks. When conducting the checks, check the person’s criminal records. You can view the person’s criminal records at various local courthouses. When you do this check, you will find minor or serious crimes if any. It is quite difficult and time-consuming to do these background checks yourself. You can hire a reputable tenant screening company to help you out.
A credit check will also help you to know the amount of debt the person owes and if he or she can afford to pay the rent. People with higher credit scores (above 700) have a very low probability of neglecting their debts. This is because a higher credit score indicates higher financial responsibilities. Such people have better control over their finances and they will not struggle to pay their rent. The truth is that some people with bad credit scores even repair their scores before looking for rent. CreditRepair.com review talks more about that.
You should also verify the tenant’s income by asking for copies of their pay stubs. That is even not enough to confirm the prospective tenant’s income. You can also call his or her employer to confirm his or her income. Ideally, your prospective tenant’s monthly income should be at least three times the monthly rent. That is the rent should be one-third of the individual’s income.
4. Abide by the Law
The Federal Fair Housing Act ensures that landlords treat all prospective tenants equally. A landlord should not discriminate against a tenant based on their disability, race, sex, family status, or religion. Aside from the Federal Fair Housing Act, all states have local laws governing renting. These are often known as the Fair Housing Act. A landlord is expected to abide by these laws too.
5. Check the Prospective Tenant’s Rental History
This is not easy but it is worth it. You should get in touch with one or two previous landlords of the tenant. You can know if the tenant was problematic or not since the landlords will tell you about it. You can ask the landlord if the person paid his or her rent on time and left the property in good condition.
You should also verify if you are speaking to a real reference or a phony one. Mention wrong details like the number of years the person stayed in the former landlord’s house. If the former landlord corrects you, you are definitely speaking to the actual reference.
6. Screen the Potential Tenant In-Person
Meet the prospective tenant face-to-face to know more about him or her. If you cannot meet them face-to-face, set up a Skype video meeting to do that. Prepare questions before meeting him or her. You can ask questions about his or her family, and lifestyle. You can ask if he or she has pets, or if he or she smokes. Do not rely on the information provided on paper, a face-to-face meeting may reveal something new about the person.
7. Choose a Long-Term Tenant
If getting a tenant is too much hassle for you, you should choose a tenant that will stay for a very long time. The tenant will reveal their history through the application form. You should verify if the person changes jobs often or moves often. Such a person is likely to continue the trend. If that happens, you will need to look for a replacement.
8. Maximum of Two People per Bedroom
More people in a room means more noise and higher wear and tear rate. That is why the Fair Housing Act considers it reasonable that a maximum of two people should be in a room. However, there are a few exceptions.
- The landlord must adhere to the local law if there is a local law. Some states have made specific housing codes and landlords residing in that area must follow it.
- The age and the number of children also come into consideration. It is reasonable to rent one bedroom to two adults with an infant.
- Size of the apartment is also considered. The bigger the size of the room, the more people it can hold. Also, rooms with living rooms can contain more people.
9. Use Your Natural Instincts
Sometimes, you may be the best judge. If you feel that something is off about the prospective tenant, it may be true. You should verify the person’s information again if you feel that way. In some cases, people apply for rent under false identities.
Doing these things does not guarantee that you will get the best tenant for your rental property. However, you will definitely be avoiding tenants that will give you too many problems. At least, you will not be chasing your tenant for rent.
This article has been contributed by Dennis Eivan Martin.