5 Simple Steps for Choosing the Right Tenants for Your Rental Property

If you own rental property, then you likely already know that it takes a lot of maintenance to keep your property appealing to renters. However, as a property owner, you can’t stop at that stage and expect things to turn out well. You need to find reliable tenants who won’t cause you trouble and will pay their rent on time. This means you need to be cautious when screening them. Of course, it’s important to remember the Federal Fair Housing Act – you can’t discriminate against potential renters based on their race, color, national origin, religion, sex, familial status, or disability. Likewise, the state you live in may have additional laws that you, as a rental property owner, must follow. Outside of such discrimination, however, you do have flexibility in who you allow to become a tenant.

So, when it comes time to begin your tenant search, you have a couple options. You can either hire a property management company to help you with the process or, if you choose to do it yourself, you can follow these steps to ensure that you bring the right people into your rental property.

  1. Set Clear Rental Criteria

Before seeking tenants, you need to have clear criteria of who can live in your property. This includes setting an income threshold, determining if you will allow smoking or pets in the rental, and other lifestyle requirements. Knowing these criteria in advance can prevent issues further along in the process.

Once you know your criteria, outline them clearly in your rental property description. While it isn’t foolproof, you’ll greatly reduce the risk of dealing with tenants who don’t meet your standards by specifying those requirements in your listings.

  1. Confirm the Renter’s Finances

Even if you’re renting out your property, you still need to remember that renting is a form of business. As such, you want your tenants to be financially responsible. To start, verify your applicant’s income through paystubs; a common threshold to meet is that their monthly income is at least three times the monthly rent. You should also contact their employer to verify their job history.

Outside of direct income, you should consider running a credit check. This will help you learn if a tenant has a history of paying their bills on time while allowing you assess their potential debts. Someone who makes three times the rent but has an excessive level of debt may not be able to pay their rent on time.

  1. Contact Their Previous Landlords

Talking with a tenant’s previous landlord can give you a wealth of information on whether that person is suitable for your property. You’ll want to confirm the tenant’s rental history, that they paid their rent on time, how they interacted with their neighbors, and if they kept their property in good condition.

If you start to hear about a tenant’s negative behavior, then they may not be a good fit. However, some landlords will lie to get rid of a troublesome tenant, so be sure to contact at least two of the tenant’s previous landlords.

  1. Perform a Criminal Background Check

On your rental application, require a tenant to provide their name and date of birth so that you can confirm a background check and avoid any potential criminal activity. As part of public record, you have legal access to criminal information. However, the process can be very time consuming, so you may want to work with a third party to complete the check. Be sure to confirm the applicant’s name and date of birth on their ID to prevent false information.

When using a background check, be aware of your state’s laws. For example, California prohibits landlords from discriminating against potential renters with certain criminal convictions, especially if the crimes don’t put other renters at risk.

  1. Pay Attention During the Property Showing

Someone that submits an application may look good on paper, but that doesn’t mean they’re always going to be a good fit. The property showing is an excellent time to ask questions about why a tenant is moving from their previous location and what made them interested in your property.

If a tenant shows up late or doesn’t show up at all, especially without any follow up, then they’re likely not a good candidate. You should also pay attention for belongings that don’t looked cared for and rude or disrespectful behavior. Never let anyone rent your property who refuses to submit to a credit or background check, or to someone who refuses to fill out a rental application.

Unfortunately, even the most cautious of landlords still end up with poor tenants from time to time. But if you remain aware and follow these steps, you can greatly improve your chances of finding the right renters for your property.

Sources:

https://www.thebalancesmb.com/the-right-tenant-for-your-rental-2124984

https://www.avail.co/education/articles/how-to-choose-the-right-tenants-for-your-rental-property