Do you have a property that you can’t decide if you should sell it or rent it? Do you want to rent it but you’re unsure about how to find a quality tenant? Nothing is absolutely guaranteed but there are seven steps you can take to help ensure you are getting the best tenant for your property and start generating some extra income.
Always check references.
Make sure you get contact information for previous landlords and reach out to them. Find out if the applicant paid their rent on time, how long they lived there, if they left the property clean and free of damage, and ask about general character.
Do a credit and employment check.
Credit checks are a good indicator of history but they are not the end-all-be-all of a person’s reliability. Consider that people will experience hardships such as unemployment or divorce and may have to file bankruptcy but that doesn’t necessarily make them unreliable. They may also be young and not have much of a credit history. The key thing to look for is a history of late payments or prior evictions.
Get the deposit first.
Before you sign any agreement and hand over the keys, make sure you have a security deposit equal to at least 4 to 6 weeks of rent. Even if someone seems trustworthy and says they will get the deposit to you afterward, don’t do it. There is no motivation to pay the deposit after they have moved in. Also, make sure you hold that deposit in a separate account so that you have it to return to them when they move out.
Meet face to face (even virtually).
Meeting people face to face can give you insights into their character so it’s an important step. Most people will want to see the property but there may be times that a potential renter is moving from out of town and is relying on the photos you’ve put online. In this day and age there is no reason to not meet someone face to face when you have video chat available. There are many services from Skype to Google+ Hangouts that will allow you video chat in real time from anywhere in the world and many even include screen and document sharing.
Don’t rush into a decision.
You don’t want your property sitting vacant for long periods of time but having a bad tenant will cost you more money in the long run. If you end up with a tenant that is consistently late paying rent, damages or doesn’t care for your property, or causes upheaval in the neighborhood, you’ll end up paying more and probably have to go through an eviction process. Take your time and find the right tenant even if it means that your property sits vacant a couple more weeks.
Check for comparable rentals in your area.
If you want to attract a quality tenant, you need to make sure that your property meet the same standards as other similar properties for rent in your area. Ensure that all repairs are complete, the property is freshly painted with neutral colors, the carpets have been professionally cleaned and that the entire property is clean from the windows to the corners of the closets. If you’re renting a property as furnished, make sure that the furniture is in excellent shape and professionally cleaned, including the beds.
Hire a property management company or broker.
You can save yourself a lot of work if you hire someone to do it for you. A broker can help you find renters and show the property but won’t help with management after the deal is closed. A property manager can help with finding tenants as well as be the middle man for you. This is especially important if you live out of town. You want to have a local representative that can collect your deposits and rent, handle maintenance issues and do on site inspections periodically. There is a cost involved in hiring a broker or property manager but the benefits outweigh the costs in the end.
Follow these tips and you’ll find a great tenant for your property. Once the first one goes well, I’ll bet you’ll be looking to invest in more real estate. It’s a great way to generate income. We at DePrato Associates are experts in buying investment real estate. Give us a call and find out how we can help!