Property owners and newbie investors regard a landlord's career path as an effortless journey of collecting rent and enjoy a passive income. While that's true, it also paints an unrealistic picture of a landlord's duties and responsibilities. You see, being a landlord is no walk in the park. There are numerous responsibilities to attend to, alongside abiding by the legal regulations governing the tenant-landlord relationship.
Screening is a crucial step to entering a long-term rental relationship and choosing tenants who are decent, reliable, and respectable community members. Having reputable and responsible tenants comes with many perks. For instance, they look after your property, reduce repair and maintenance costs, and are mindful of their rental obligations.
However, finding reputable tenants is a process that involves scrutiny and strategy. A tenant may seem perfectly decent, only to end up damaging your property or using it for criminal activities. So, how can a landlord pick tenants who are trustworthy, responsible, and decent people? Keep reading to find out.
Setting Priorities
As a landlord and property owner, it's crucial to set priorities and criteria for the people you're willing to rent your property.
Generally, landlords have the following requirements:
- Timely rental payment
- Looking after the property
- Minimal repair and maintenance costs
- No criminal activity or subletting
- Long-term relationship
Decent and reliable tenants have a responsible attitude towards their financial obligations, and they take good care of their rental homes. They prioritize communication and alert the landlord about maintenance and structural issues without delay. Reliable tenants seek long-term relationships and do not violate the clauses of the rental agreement.
Setting priorities will help you approach the screening and interview process with the right questions to probe the applicants. Establishing a criterion will help you screen out all potential tenants who align with your rules and requirements. Then, you can vet the most promising applicants with financial screening and background checks.
Outline your Requirements in the Advertisement/Listing
Your rental advertisement or listing requires close attention to detail. It's the perfect opportunity to state your requirements and establish an eligibility criteria for the applicants. Tailoring the rental listing to your needs will help you attract desirable applications.
You must outline all requirements and regulations in the listing. For instance, do you allow bachelors or pets in the accommodation? Or do you have a strict policy against wall paint and other renovations? Be sure to advertise your listing in the right places to attract people from a specific demographic.
For instance, advertising your listing at rental directories or listing portals will help you attract professionals.
Job Security & Stability
Does an applicant frequently shift jobs and have moved around different cities and towns before landing in your neighborhood? Switching jobs and moving around is a pattern that reveals an individual who doesn't want to settle down.
Suppose you're looking for a tenant who can enter a long-term relationship. In that case, it's crucial to prioritize candidates with a stable job and lifestyle. An unstable employment history indicates that the tenant could enter circumstances where they are unable to pay the rent. You may have to deal with a sordid eviction process and then start searching for a tenant again.
Financial Health
The tenants' income security and financial health determine their ability to contribute to your rental income. It's essential to obtain copies of at least three months' payslips, alongside running background checks to examine their credit history.
More importantly, you must review their payslip to ensure the rent accounts for at least 30% of their monthly income. Applicants who enjoy financial health and job stability with a stable rental history always make the most reliable tenants.
Do they have any references?
How can you verify the tenants' history as an employee and a tenant? We strongly advise landlords to look for references from their employers and former landlords. It's a common practice, and it will help you determine how long they've lived in the previous rental. Talking to the employer, HR department or former landlord will unveil a great deal about the tenants' history.
It will help you determine whether they make timely rental payments, look after the property or cause any problematic situations. We must stress the need to investigate whether the applicants like to move around frequently or spent years living in the same rental.
Lifestyle & Needs
Each tenant has a different lifestyle and unique needs, and tapping into their lifestyle can help landlords gain valuable insight. For instance, a newly married couple or a family with children are more likely to desire the stability of a long-term home. Likewise, students enrolled in a 3-year program are also more likely to continue living in the same accommodation.
Be sure to examine the lifestyle and needs of the tenants before renting them your property.
Get to Know the Tenant
Suppose your listing attracts dozens of applicants, many of which seem promising, but you must settle on one. In that case, you cannot get to know every single applicant. We advise screening out all applicants that do not align with your criteria and get to know the candidates that seem most promising.
It’s crucial to sit down for a detailed consultation session so you can interview each candidate with probing questions. You can invite families out for a friendly dinner outdoors or at your place so you can get to know the family well. With singles, you can conduct a professional interview at your office or the rental accommodation after giving them a tour of the property.
Conclusion
Conducting background checks, screenings and interviews seem like a lot of trouble, right? Wrong! You see, going through all this trouble to pick a reliable and respectable tenant will save you much more significant disruptions in the future. You can collect your rental paychecks without having to rush to attend to staggering repairs every month. So, be sure to create a strategy to screen out all applicants and pick the perfect tenant. You see, it’s entirely possible!
If you’d like to talk more about property management, or you need help with Everest Property Management, please contact us at Everest Realty.
As a top producing Realtor and Property Manager; Terry specializes in sales, extensive construction homes, rentals, REO’s, short sales, and all aspects of Real Estate. After graduating the University of Michigan with a master in MBA, Terry continued his endeavor and now has over 15+ years of experience in the Real Estate world. If there is anything that has to do with Real Estate and sales, you can always be sure of Terry to provide important, specialized knowledge.
