How To Find A Good TenantBy Paul Esajian on June 28, 2019
The success of your rental property is directly based on the strength of your tenants. Who you rent to will determine if the next twelve months are smooth sailing or a constant nightmare you can’t get out of. When you face a vacancy, it is critical that you don’t let the short term influence your decision. The goal isn’t to simply put yourself at ease and find a tenant. The goal should be to find one you are completely comfortable with that you know will pay the rent every month. Without rent payments coming in everything comes to a complete halt. You will have to consider eviction, which opens a huge can of worms that is more expensive than any one-month vacancy. Here are five things to look for when evaluating any prospective tenant.
- Response Time: The first thing to look for with any tenant is how much they want the property. It may seem like a small thing, but a prospective tenant’s response time tells you just how motived they are to proceed. The quicker they are in responding to texts, emails and phone calls is an indicator how responsible they are and what you can expect from them as a tenant. On the flip side, a tenant that doesn’t respond for 24 hours or can’t provide requested documentation will be a problem if they get the property. Think about how you will be if you have to chase them for rent or if there is an issue that needs immediate attention. Their response time alone should not be a reason to rent, but it should push you to move forward with the rest of your application process.
- Work Stability: This should go without saying but every prospective tenant should go through an application process. Regardless of how well you know your tenant or how much they may want the property they must be vetted the same. Without an application you truly have no idea who you are renting to and are essentially rolling the dice and hoping for the best. The application should start with an evaluation of their work history and the probability of continued employment. As we stated, everything starts with receiving the rent. A strong work history shows that they are making money and paying rent shouldn’t be a problem. You have every right to ask for a recent paystub and the number of HR, or someone at their employment. You can either send over a verification of employment form or pick up and phone and talk to someone. Make sure the number provided is that of HR. In some cases, devious tenants will give the number of a friend or family member hoping the landlord does not verify. Only after you have reviewed the paystub and talked to the right people at their job should you move on to the rest of your application process.
- Rental History: In addition to a prospective tenants work stability it is important to follow up on their rental history. There is no question that even great tenants move with regularity. However, there is always a reason for the move. You can excuse moves based on work, school or family. The moves that should draw a red flag are disagreements with landlords. Even though there are plenty of poor landlords out there, they are the exception rather than the rule. In most cases a landlord will treat their property like an asset and do everything they can to maintain it. If a tenant is constantly pointing fingers at past landlords and running into trouble you should think closely about renting to them. Always call any previous landlords listed and get both sides of the story. A previous landlord typically doesn’t have any reason not to be honest, but you shouldn’t take their word blindly. Past rental history is usually a good indicator of future actions.
- Agreeability With The Lease: Your lease is the one item you have to protect you from poor tenants. It can help settle disputes and mediate unexpected issues down the road. You should spend enough time on your lease that you know everything on it and are comfortable with the language. If you don’t want pets or smokers that is your choice and your tenant must adhere to it. If they start negotiating a pet even before they are in the property what else do you think they will do once they are in there? A tenant can ask plenty of questions and get clarification when needed, but they shouldn’t be asking to break, or even bend, the lease before it is signed.
- No Haggling With The Security: When you put your property on all your various marketing platforms you should have a good idea of the supply and demand. However you came up with the monthly rent you should be able to justify it. When tenants see the property and ask about the rent there should be little room for negotiation. Experienced tenants know that they are going to have to come up with a security deposit, usually consisting of the first months rent in addition to a month or two extra. If they ask you to take a discount or give them a few weeks you need to examine why. If they are having trouble finding the security deposit they may not have much cushion if something unexpected pops up. Whatever you decide to do, never let a tenant in the house without having the security deposit in place.
With just a few questions and a little research you can get a good idea on who you are renting to. Picking the right tenant makes all the difference in a rental property.