Need to avoid slippery tenants like the plague?
You can spend hours reviewing applications and still end up with underhanded renters that make your life miserable. How do you tell from a piece of paper who will maintain your home with care?
Whether your rental home is a new acquisition or a long-time haven, you need to find the perfect tenant. Here are some great tips for choosing the right one.
While posting the property yourself is often cheaper, it’s also very time-consuming. And you should double check that you’re right about the cost. Sometimes the tenant pays the real estate agent’s fee, most often in areas that are rental markets (big cities).
The services an agent provides can be the difference between reputable tenants and a long, frustrating lease with dishonest ones. Agents will have access to more listing sites and a bigger network.
Choosing the right agent means a faster lease, too. They can do group showings and take higher quality photos. A real estate agent also lends credibility to your property and makes people more ready to trust you.
It’s helpful to get advice from professionals, too. They can teach you about marketing your home. And some even offer helpful ideas for how to scrutinize rental applications.
Have the potential tenants rented long-term before? Were they always on month-to-month leases? How long did they stay in one place?
These are all pieces of their history that can give you clues about whether they would be a good fit for your rental home.
Don’t ignore references. Make sure you call to talk to them instead of skipping that step.
You shouldn’t be afraid to ask tough questions like, “Did they pay their rent on time?” Ask about their care of the property and other habits you’re worried about.
You might want to know if they were asked to leave or if they left on their own. Open-ended questions can be good, too, like, “Is there anything else you want to share with me?” Assure the person on the phone that everything they say is confidential and you won’t share it with the potential tenant.
One of the best ways to get honest information and extra tidbits is to let them talk. Listen while they speak without interrupting.
Even let the conversation lag for a couple seconds, before asking another question. This makes people uncomfortable enough that they fill in the silence, and they sometimes share things they wouldn’t otherwise.
If you don’t hear anything back from the reference checks, follow up. People get busy and forget to return calls. Try an email address if the phone number doesn’t get you the results you need.
And if you still can’t get ahold of anyone, ask the potential tenant for a set of new references. It’s okay to require that of applicants with no exceptions.
You don’t need to feel bad about setting a strict income requirement for your tenants. Not only is it advisable but it’s also your right as the landlord.
It’s a good idea to require your tenants to agree to a credit check. If they have a financial history of late payments and debt problems, you have reason to doubt they’d pay their rent on time every month.
Hiring a company to help you with this screening can be easier than doing it yourself. You can even combine it with the criminal history screening (see below). And often they’ll package the two for a cheaper cost than you’ll pay for checking each one on its own.
When you get the report, look for the debt-to-income ratio on their credit check. If they don’t make enough money, but they don’t have any debt, they may still be able to pay the rent. Someone who meets the income requirement but also has a lot of debt payments might having more trouble paying the rent.
It’s also important to check a possible tenant’s income. An ideal tenant makes at least three times the rent at their job every month. That’s gross income (before taxes), not net income (after taxes and other withholdings).
To check that they earn what they say they do, ask for copies of their pay stubs. It’s harder when potential tenants say they make variable income. One example is when someone owns their own business.
In this case, try asking for several pay stubs so you can see an average or several weeks or months of pay history. If they average enough money, then if they budget well, they should be able to pay the rent.
Read up on the local laws in your state about housing. Each one requires equality, yet they all vary a little on the details. Make sure to find out the specifics so you don’t violate any laws by accident.
You aren’t allowed by federal law to discriminate, either. The Federal Fair Housing Act says you have to give equal and fair treatment to all applicants. This means you can’t give better or worse treatment to someone based on their skin color, ethnicity, disability, marital status, gender, or religion.
It’s important to do your research and get informed, otherwise you may find yourself in trouble without meaning to.
Some states consider it discrimination not to rent to a potential tenant because of their criminal history. While it’s not listed above as part of fair and equal treatment, you should double and triple check so you don’t get in trouble.
The easiest way to screen tenant backgrounds is to hire a service to do it for you. Minor offenses can be hard to find if their only state-level convictions. You’ll spend a lot of time tracking down every state’s records if you do it yourself since they aren’t all found in one place.
Make sure the service you hire covers federal and state convictions, as well as county courts and sexual offender registries.
Don’t lose out on finding the perfect tenant for your rental property. Remember to use a real estate agent, examine their history, make sure they can afford it, know the law, and do a background check.
When you follow these helpful tips, you’ll build quality relationships with tenants that will treat your home like their own. You’ll also build a reputation as a great landlord and respected neighbor.
For help listing your rental property and finding the perfect tenant, contact Sterling Place Properties today.