Real estate is among the most lucrative fields for most investors. Rental properties have a certain appeal, especially with the promise of continuous income flow. Nonetheless, real estate investment isn’t without its fair share of challenges. As a landlord, you have to understand your rights and responsibilities. Owning a property is not enough. You need to market it, vet, and select the right tenants, and keep the property in top shape to maintain them, not to mention that you don’t want to fall into the wrong hands of the law.
Marketing might not be that challenging, especially with a online platform for houses that lets you reach an extensive pool of tenants. Nonetheless, it would be best if you vetted them, keeping in mind that the wrong tenants can run your business down. Some unscrupulous tenants delay the rent or fail to pay, damage your property, especially facilities and appliances, and could taint your reputation. With such considerations, thorough vetting can’t be emphasized enough. Here are some ways to know a suitable tenant for your property.
Where are you relocating from, and why are you moving? Asking such questions can give you a glimpse of the tenant’s quality. If they aren’t hesitant to answer, it should raise a red flag. Please don’t settle for their word of mouth, though. Ask them for references; it could be their previous landlord or neighbors. If they aren’t forthcoming, it could mean they are not honest and fear that you’ll uncover it before they sign the rental agreement. While easily overlooked, talking to the references to establish a potential tenant’s rental history can considerably help, ensuring that you only take the good ones who’ll make your investment profitable.
Criminal background check
While a criminal background doesn’t disqualify a potential tenant, it shouldn’t be overlooked. If an individual has a repeat criminal history, they aren’t the best fit for your property. Take the tenant’s ID and run it for criminal checks. If they are honest and the criminal screening checks out, you can pick them, but tread carefully if the record includes serious crimes. Some criminal records are public information. Nonetheless, enlisting a screening service for thorough checks is recommended, ensuring that you get a detailed report.
Are you employed, self-employed, between jobs, student…? The list is long, but a significant check is ensuring that the tenant can raise the rent. If they are employed, ask them to provide their employer’s contact information. Contact and verify the information. If they are self-employed, verify that their income status. For students, verify that they are indeed in school and establish who is responsible for their rental payments. If they have no verifiable income generation stream, you can’t expect them to make on-time rent payments, and you should think twice before accepting them on your property. Your rental property is a business, and you should only accept tenants capable of making complete and on-time rental payments, facilitating smooth progress.
What’s your gut feeling? You want tenants who’ll not only make on-time rental payments but also stay in your property for an extended period. The vacant property doesn’t generate any income, yet it requires maintenance and marketing, expenses that can affect your rental business’ profitability. Considering a tenant’s personality can help you establish if they are a right fit. For example, you can tell if the tenant keeps hopping from one property to the next with no valid reason from the rental history – this will ensure that you pick a tenant who’ll offer stability to your rental business.
Tenants who delay or fail to pay their rent are a pain in the neck. Evictions aren’t fun either, especially as they can be costly. Therefore, thorough tenant screening can’t be emphasized enough as you run a rental business. You are a step closer to finding good tenants and running a profitable business with the above pointers.