Property Management Rental Ownership Advice from S & R Properties
Owning rental property can jumpstart your financial goals and let you retire years early. It can also be a disaster. To avoid horrible tenants, damaged houses, and unpaid rent, you need to effectively screen prospective renters. Here are five tips to make sure you find the best tenants possible for your properties.
Take Great Pictures–and Video–of Your Rental Property
High-quality tenants want to see high-quality properties. Don’t post a few grainy exterior shots of your rental home and expect to get applicants knocking on the door. Take high-resolution pictures and a walk-through video of the entire unit. Even if your property has a few less-than-desirable features, it’s better to be upfront about it. If you try to hide anything, smart tenants will figure it out before signing a lease.
Evaluate Their Texts and Emails
Before you schedule an in-person look at the apartment, try to exchange a few emails or text messages with the applicant. They don’t need to use perfect grammar, but they should demonstrate basic business skills. If they’re already asking you to waive the security deposit, change the day rent is due, or allow pets in a no-pet unit, they likely won’t be model tenants. Save yourself the headache and wait for a different applicant.
It’s inconvenient to meet individually with prospective tenants, but this is one of the best ways for you to get a sense of character from applicants. They should wear clean clothing, they should show up to the appointment on time, and they should not bring adults who will not be living in the apartment. If your applicant shows up with a romantic partner or family member, they may be planning to move that person into the unit without notifying you. You’ll have to use your intuition. If you get an odd vibe from the applicant, take that as a sign to move on to the next tenant. You could be stuck with this person living in your unit for years, so put in the effort to find a good match.
Run a Credit Score
The easiest way for you to learn about a stranger’s personal finance skills is to run their credit score. You want a tenant who is responsible enough to pay their rent every month. If they have a credit score of 600 or higher, you’ll know they’ve paid their bills in the past. A few late payments or a medical bill in collections aren’t going to lower a tenant’s credit score below 600; that takes a consistent pattern of skipping out on financial obligations. You should let tenants know in your initial online postings that you require a credit score of at least 600. That will lower the number of bad-fit applicants who contact you.
Ask About Criminal History and Conduct a Background Check
You’re not running a background check to eliminate any tenant with a criminal history. That might be illegal in your state, and it wouldn’t be a good business practice. Someone with a misdemeanor from college pranks or recent arrests from political activism can still be a reliable tenant. Let potential applicants know that you will run a state and federal background check but that you’re willing to work with them. If a tenant is honest about their history, has non-violent offenses, and demonstrates a current sense of financial reliability, move forward with their application.
Your job as a landlord is to get the best-quality tenant in your rental unit that you can. It may seem harsh to use these metrics to evaluate applicants, but you have limited options for screening people before giving them access to your expensive investment. By using these five tips and clearly communicating your standards to potential tenants, you can get great renters with a minimum of fuss.