How To Get The Right Tenant For Your Rental Property

How to Get the Right Tenant for Your Rental Property:
Whether you have just acquired your first real estate investment, or you are a seasoned landlord, you always want to find the most befitting tenant for your property. A responsible and trustworthy tenant is arguable the most vital aspect of your property investment—the supply of your income. Ideally, you want a tenant who will communicate effectively, pay on time, and not break any of the rules in your contract. Here are some ways in which you can get the right tenant for your rental property.

Know What You Are Looking For:
Before you open your apartment, townhome, or condo to walkthroughs, reflect on what you are looking for. How many tenants are you allowing to live in your property? Do you want an individual, or can you accommodate a family of four? Next, you need to lay out what you must have in a tenant and what the deal breakers are. For example, you want a tenant who is respectful of rules. You also want someone who is able to communicate effectively of whom you can rely on to stay in touch if you need something from them. Above all else, you want someone who will pay their rent in full and on time.

GP Tenancy Agreement

Meet Them in Person

Providing a walkthrough or open house is a great way to get an impression of your potential tenants. If some of your visitors are interested in renting your property, meeting them in person is a great opportunity to briefly get to know them. Ask them questions regarding where they work, and what they do for a living. You can also ask them about where they are from and how long they have lived here. Inquire about what they like about the area to get to know their motivations for moving. With simple small talk, you can get a decent first impression. Do this in order to gauge their personality, and see whether it meshes with yours. If they seem impatient, too aggressive, or otherwise difficult, they may not be the right fit for you. Keep in mind you will have to maintain a relationship with them indefinitely, so you want tenants who will work with you.

GP Credit Score

Examine Their Credit Score
The most important thing you want out of a tenant will most likely be whether they can or will pay the rent. Just like with any big purchase, prospective landlords will need to check prospective tenant’s credit. One of the best ways of figuring this out is to have them perform a credit check. Analyze his or her credit score to determine whether or not they have outstanding debt, or are negligent in their payment. If someone is not consistent with paying off their debt, this should be a huge red flag. Chances are, if they have no issues paying off their debt, they will have no issues paying your rent.

GP Tax Liens

Look for Any Tax Lien

A tax lien is issued by the IRS and applies to those who have neglected to pay their taxes. When someone is under the control of a tax lien, this means that they have failed to respond to other notifications from the IRS regarding outstanding tax debt. Often, payment deals can be negotiated between the IRS and the taxpayer, but someone who does not do so is threatened to have their paychecks levied and their assets seized. This is a significant indication that they will not be able to pay rent.
Check for a Criminal Record

Credit and criminal background checks are essential to picking the right tenant. It is crucial to check for any criminal activity before you sign the dotted line with your tenant. Keep in mind that you want a tenant who can follow your rules and who won’t cause unnecessary trouble.  It is important for landlords to be aware that in some areas initiatives have been put in place to prevent discrimination against ex-criminals. In fact, some state governments provide incentives to property owners who house those who have convictions.

If you’re renting out a property, ensure yourself the best possible tenants by following these important strategies.

John C. started Action Economics in 2013 as a way to gain more knowledge on personal financial planning and to share that knowledge with others. Action Economics focuses on paying off the house, reducing taxes, and building wealth. John uses the free tool Personal Capital to track his net worth and posts quarterly updates on his finances. Check out the Action Economics archives section for all past posts.

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