Not all tenants are alike. Some are great, some are good, and some are just outright bad. For every rental property owner, the goal is to find excellent tenants that take care of your property, pay their rent on time, and follow the rules of the rental agreement. Unfortunately, there’s no perfect strategy on how to find good tenants. However, there are several things you can do that makes it more likely.
Surveys of landlords have shown that finding good tenants is one of their top 5 primary concerns. Managing tenants was also in the top 5.
Vacant rentals don’t make you money, but rushing into a lease agreement with a bad tenant can result in constant issues and residents that don’t care for your property nearly as much as you do. Eviction proceedings can take weeks to months and cost you thousands of dollars.
Keep reading to learn how to find good tenants and then keep them happy enough to stick around:
What Is A Good Tenant?
A good tenant usually has a positive credit report and steady income. While past personal financial history is no guarantee of rent flowing from them continuously every month, it’s a better bet. Pull a credit report to find out if they have a healthy track record of paying their bills on-time. It is also a good idea to make sure they’re able to cover any possible property damage by asking for a security deposit in advance. Additionally, positive references from prior landlords are always a huge plus, as is a history free of evictions.
Understanding The Laws Around Tenants
Tenants have rights, and they start even before you talk to them. Learn the laws that apply to your market about what your rights and responsibilities are to make sure there are no issues down the line. Discrimination is a huge problem in the property industry, and there are federal, state, and local laws that all deal discrimination of renters and potential renters. Make sure you have a clear understanding of the laws that apply to you. Court costs related to accidentally violating a person’s rental rights can be high and add stress to your life.
There are many ways to go about screening tenants, but you should consider four specific things: credit reports, criminal backgrounds, general background checks, and eviction reports. Be careful to follow the letter of the law here, as there are many kinds of information you can and can’t use to select a tenant. However, these are great ways to find red flags of tenants to avoid and find those who have apparent histories of being model residents.
Above all else, when it comes to finding tenants, the screening process is vital in protecting your property. Bad tenants can cost you money. Screening prospective tenants with a consistent and objective process will help ensure that you are getting viable tenants in your rentals. When you do find great tenants, do everything you can to keep them. Go easy on people when you raise rents. Experienced renters expect increases, but their paychecks don’t usually follow suit. Be sure you are pricing your rent correctly for your market and property condition, and if you do raise rates, make sure you’re keeping the property up to snuff.
Even consider upgrades and enhancements whenever it’s feasible. Welcome gifts are great ways to provide new tenants small tokens of your appreciation. Start your tenant relationships off on the right foot. Then, make sure you do things like dealing with troublesome tenants and maintenance requests as quickly as you can. The longer tenants stay, the shorter your vacancies will be if you have them at all.
Setting Expectations With Tenants
When you first put up photos and listings advertising your property, you’ll hopefully start getting calls and emails from prospective tenants. Calls coming in from your advertising provides you an opportunity to get new renters and the ability to get to know your potential renter. It’s important that your prospective tenants understand your expectations upfront so that there are no misunderstandings that can cause issues later on.
For instance, are you okay with renting to smokers? What about pets? At a minimum, you need to know the names and contact information of every person that will be living in your property, even if only one name is on the actual lease. As a general rule of thumb, you don’t want more than two people per bedroom on average because occupancy issues can arise.
Many landlords now mandate their tenants purchase renter’s insurance. Requiring renters to carry renter’s insurance is crucial as it helps protect your tenant and your property. If you are a landlord for long you will find that accidents happen. It is vital to ensure that your tenants renters insurance policy provides the right protection so you are not on the hook for damages or paying out money to them or visitors due to an accidental injury. Mandate renter’s insurance, verify their policies and make sure the policy coverage is sufficient to protect you and them. Include this provision in your lease agreements along with any penalties if they allow their coverage to lapse.
It is important to work with an expert in lease agreements such as a property management lawyer to come up with specific, detailed, and iron-clad lease agreements. You want to make sure that your agreement is detailed and clear on your expectations and rights as well as your tenants rights. In the end, your lease agreement should define the very nature of your landlord, tenant relationships. The right rental agreement can protect you and your property.
Using A Property Management Company
If you’re not already using a property management company, then it’s time to consider it strongly. A property manager will have the experience you need to help manage your property and the ability to find good tenants. Your property manager will ensure your property is in good shape and handle any issues that arise. Not to mention, the extra benefit of freeing up your time and eliminating stress are a big plus.
At Real Property Management Consultants, we have a simple approach. We provide our clients with trustworthy, professional, affordable residential property management services. Our services include everything from screening prospective tenants, filling vacancies, collecting rent, maintenance programs and more.
Areas we Serve
At Real Property Management Consultants, we serve Cass County, Clay County, Jackson County, and Johnson County KS. If you are a residential property owner in need of help managing your rentals, we can help!
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.