Being a landlord involves a lot of important decisions. When you’ve bought that condominium for sale in your city and plan to rent it out, the most important one is to choose the tenant you will rent it out to. Many people assume that landlords always say yes when it comes to accepting tenants. But if you want to be smart about your property, then you need to be more selective. Here are some tips on what to look for when it comes to searching for the ideal tenant to rent from you.
The top concern that you have to check is the potential tenant’s ability to pay. Even the cheapest properties have a high price tag. If you want to make them profitable, you need to have tenants that can pay their rent. There are several ways to make sure of this. First, there is the proof of income. Their latest payslips should be able to show how much they can afford. Ask for three months so that you can be sure that the income is consistent. As a rule of thumb, if they are earning three times as much as your rent, then they should be good.
Besides their salary, you should also do a check on their finances by asking their previous landlords. A tenant that was always late in their rent is not going to change easily. If you want to be sure, you might want an advance on their first few months of rent and a deposit.
Criminals are always bad for business. This is especially so when you rent out your rooms to them. While they often flash around their money to get you to rent out to them, the trouble they bring can be more than they are worth. Police investigations and the damage they can do to your property can eliminate all the potential earnings you have on the property. Criminality also means that they don’t care about the law. If they aren’t afraid of the government, your tenant rules are not going to stop them.
A criminal background check should be easy. Many companies do pre-employment criminal background checks, and it is perfectly legal. Do the same, and you should be able to have a clear idea of whether they have a criminal history.
There is also the personality of the potential client. Some people are argumentative and are difficult to please. You will immediately figure this out when you interview. Tenant screening interviews reveal a lot about your potential tenant so you shouldn’t skip them.
Sit down with them and ask them basic questions about themselves. This should also be the time when you ask them for proofs of income and references. Tenants who are polite and accommodating tend to be good tenants. Those who are defensive usually have something to hide, which makes it a big red flag.
Single Or A Couple
There is also the question of how many people are renting. If you are renting out a big enough property, you might be seeing an influx of people. Single tenants are easy enough to screen, but they can bring their trouble. They usually bring home dates and might potentially have issues with payment if they are alone. Couples are a bit better, but they do have their problems. You might end up suddenly having a third unexpected tenant if they are planning to have a family, but that is not often. Couples can maintain a place better and tend to have more stable finances since two people are earning money.
During your client interview, you should also consider the stress that a tenant can bring you. For example, some potential renters might have pre-emptive requests for modifications and changes to the rooms to accommodate them. While some of these requests can be reasonable, others are signs that they are high-maintenance tenants. For example, if they ask permission to paint their rooms, a specific color is fine. But if they want you to do the painting, that should be a red flag. If you are fine with handling these types of tenants, then go ahead, but you might want to think of other renters if you can’t.
Some landlords complain a lot about their tenants not paying on time or being headaches. However, the responsibility for allowing them to rent lies with the landlord. It is their fault for renting to bad tenants. Don’t end up like them and be serious about vetting the sort of people you allow to rent from you.