Finding good tenants for your rental property is essential for a successful and stress-free experience as a landlord. Having destructive or irresponsible tenants is one of the riskiest things that landlords are likely to encounter. However, it can be hard to know how to identify these tenants and what criteria and evaluation methods are ethical or legal. Remember to set clear expectations and choose the first qualified applicant to avoid potential legal problems. Here are some best practices for finding and selecting great tenants:
Advertise Effectively
To attract the right tenants, you need to advertise your property in places that good tenants will see. Post your listing on popular rental websites, put up a “For Rent” sign on the property, and utilize social media platforms. Make sure your listing is detailed and accurate, highlighting the features of your property that may appeal to potential tenants. Having more applicants increases your chances of finding a tenant quickly, and the better you advertise the more applicants you will get.
Screen Applicants Thoroughly
When screening applicants, look for renters who have a good rental history, stable employment, and a clean criminal background. It is important to establish rental requirements before you begin screening tenants and make sure that you use the same screening methods and criteria for everyone. Using the same criteria for everyone helps you stay ethical and avoid violating Fair Housing standards. This will help you determine whether the applicant is responsible and reliable.
While you are checking potential tenants, consider doing a credit check, a background check or inmate lookup, and other legal checks such as checking for local arrest or court records.
Ask for References
When you ask for references on your rental applications, it’s important to verify that they are accurate and that you aren’t being tricked. You should call all the references and establish their identity before you begin asking about your applicant. Once you have verified the reference, ask detailed and specific questions that will help you learn more about the tenant. Ask the same questions for each tenant in order to avoid potential Fair Housing violations. Have your questions prepared ahead of time so you won’t forget anything important or accidentally request information that is not pertinent or ethical?
Establish Income Requirments
Your tenant income requirements should be clearly laid out in your rental application so potential tenants won’t waste their time applying for housing they can’t afford or don’t qualify for. Income requirements help avoid a situation where your tenants get behind or can’t afford to pay rent.
Your income requirements should be clear and they should be the same for all tenants. This does not mean that you will have the same requirements for each house, however. For example, apartments with utilities included might have lower income requirements because tenants won’t have the expense of paying utilities separately. Common income expectations ask potential tenants to make double or triple the monthly rental cost.
Conduct a Personal Interview
Take the time to meet with potential tenants in person or over the phone. Ask questions about their rental history, employment, and personal background. This will give you an idea of whether they are a good fit for your property. Remember, you cannot choose tenants based on race, religion, or other protected classes. When you have your personal interview or phone interview, make sure that you do and say nothing that could be construed as basing your choice on these things. Make sure that you don’t have any unconscious biases by laying out clear tenant requirements and choosing the first applicant that meets these requirements.
Take Advantage of the Rental Application
Have all potential tenants fill out a rental application. This should include information such as their name, current address, employment history, and references. You should include all expectations and requirements you have on the application so your tenant doesn’t waste their time and money applying for housing they won’t be qualified to rent. This includes background and credit requirements and a specific income amount that your tenant must have. Be specific and apply the same requirements to all tenants to be fair and ethical.
Once you have gotten potential tenants, be sure to check the information provided on the application. Run the background checks, verify credit numbers, and verify income with paystubs and a call to their employer. If you don’t verify the information on the application, you won’t be able to determine qualified applicants.
Collect a Security Deposit
A security deposit can provide a financial cushion in case of damages or unpaid rent. When you decide on your deposit amount, make sure it is in line with your state’s laws and regulations. There may also be regulations stating what you can do with the deposit. In some states, it must be invested and the interest given to the tenant. Other states have different regulations. There are also restrictions on what you can use the deposit for when your tenant leaves and how long you have before it must be returned to them.
Use a Lease Agreement
A lease agreement is a legally binding document that outlines the terms and conditions of the rental agreement. This lease agreement helps to protect both you and your tenants in the case of any misunderstanding. Anything you include in your lease will be legally enforceable unless it is superseded by other ordinances or extenuating circumstances.
You should try to include as many important variables and potentialities in your lease as possible. For example, if you don’t include your pet policy in your lease, you may not be able to enforce it or add it later. Make sure your lease agreement includes important information such as rent due dates, the security deposit amount, and the length of the lease. When you write your lease, make sure that everything you include is legal and ethical. It’s a good idea to have your lease written or checked by a lawyer.
Conclusion
By following these steps and carefully verifying all information you are given, you can increase your chances of finding good tenants and creating a positive experience for both you and your renters.