The tenant you choose can make or break the success of your rental property investment. It’s very important to search for and locate the best tenants to put into your rental property, and today we’re sharing some tips on how to do that.
Curb Appeal: Appearance is Everything
The first key to attracting quality tenants is keeping up the appearance of your property both on the inside and the outside. This includes mowing the lawn, trimming the bushes, and making sure the flowers look nice. When a potential tenant first walks into your property, you want them to know the owner of the home is interested in taking care of it. All of the little things should be working, and the property should be kept clean and looking fresh and nice.
The Tenant Application Process
When you find people who are interested in applying for your property, there are some things you can do to make sure you weed out the bad ones and only keep the good ones. First, have a consistent rental application. You want the same document or form for every individual who wants to apply for your property. Make sure the application is filled out in its entirety. This ensures you know as much as you can about each applicant on the rental application. Any potential residents who are 18 years of age or older should be required to fill out a rental application.
Check the Tenant’s Credit
The first part of your screening process is to take a look at the credit history. Check their credit score and find out if they have any delinquent utility bills, if they have been evicted, or if they have outstanding debts owed to previous landlords. If someone is not able to pay their electric bill or water bill, you probably do not want them in your property. Certainly if they still owe a previous landlord, you do not want to take a chance renting to them.
Proceed with caution when you’re looking at an applicant’s criminal background history. You always want to avoid applicants who have been convicted of felonies that have to do with housing. For example, if an applicant has been convicted of manufacturing drugs, you do not want that risk in your rental property for obvious reasons. Aside from the felony charge, manufacturing drugs can cause significant damage to the property itself.
Arson convictions are another type of felony you want to avoid. No one wants a convicted arsonist living in their property. You have to be careful when looking at criminal backgrounds for fair housing reasons and HUD’s new disparate impact guidelines, but you can certainly consider felonies related to rental property.
Verify an Applicant’s Income
Income is a crucial factor when deciding if a tenant is the right fit for your property. Does this applicant have the ability to pay the rent in a timely manner? A good rule to follow is the 3 times rule. An applicant should have a monthly income that is 3 times the monthly rent. This means, for example, if the rent is $1,000, then the applicant should make at least $3,000 a month in income. Pay stubs and other forms of documentation can verify this.
If you take care of your rental property, take a look at credit and criminal reports, and verify income, you can find the best possible tenant for your rental property. If you have any questions or concerns about placing tenants, please feel free to contact us at New Heights Property Management.