Having your rental property occupied by high-quality tenant should be one of your utmost goals as a homeowner. Of course, the quality of your tenant would determine your return on investment.
Some tenants could be problematic. It could be the problem of not paying their rent on time or deciding not to pay at all. Such situations often lead to litigation, stress, time wasting, long eviction process, and ultimately, a loss of money.
There are also other cases of tenants who failed to notify their landlords on time when things go wrong with the property they lived on. Such delay may create additional problems that may cost the landlord more money to fix.
In the real estate world, news abounds about tenants who use rental properties as bong stores, cat rescues, or drug labs etc. There is no doubt that one of your reasons for investing into property business is to make money. Your dream is to get tenants that pay their monthly rents on time as well as take good care of your property as if it’s theirs. However, high-quality tenants are often difficult to come by.
So what trait should you look for? How do you identify high-quality tenants for your rental property? Here are a few tips:
1. Lookout Responsibility Trait
If you have a responsible tenant living on your rental property, you will have a rest of mind. This is because a responsible person won’t delay the payment of his or her monthly rent. There is a higher likelihood that such tenant will always abide by the lease terms and conditions. The problem, however, is how can you tell who is responsible person?
Here are four ways you can to tell:
Study the potential renter’s credit report: If you can take your time to study the applicant’s credit report, it will give you an insight into his or her level of responsibility. It will show you how financially responsible a potential tenant is. DoryAngel Property managers can help you achieve this. The credit score may not tell you the whole story, but it could be a pointer to some salient issues if you read the entire credit report.
Interview previous landlords: By interviewing past landlords of places where your potential tenant have lived in the past, you can determine how responsible the person is. A responsible tenant won’t mind fixing minor things that go wrong in the house. More also, a responsible tenant will inform the landlord as soon as there is a major damage that needs attention.
Observe the applicant’s communication skills: A responsible person will not see any reason to hide anything from you. They tell you relevant things about them even without asking. This is the kind of person that will notify you immediately if there is any leakage in the ceiling or other problems elsewhere.
Notice if they keep their words: Responsible people keep their words. They will show up if they promise to see you for a meeting. If perchance they will not be able to make it to the meeting, they’ll call to apologize and let you know when they’ll be available.
Whether the tenant is responsible or not, it’s a good practice on your part to always schedule regular inspections of your property, at least once or twice in a year. Conducting regular inspection of your property will let you know if there is something that needs your urgent attention.
2. Ability to pay
One of the traits of high-quality tenant is his or her capacity to pay rent. To be sure if your applicant will be able to pay rent, it’s best to verify his or her income. The golden rule is that your potential tenant should earn enough that 30% of the income will be enough to pay rent. You can also study their credit report to see how much debt they owe. The level of their debts would determine if they will be able pay their rent.
If the applicant is a college students, or people in other categories, who may not be able to afford the property on their own, you can accept them along with a co-signer. However, the co-signer may have to apply as well so you can be on the saver side.
3. Lookout for Honesty
Check if your applicant lied on their applications. If you discover any lie or cover up on the application, consider it as a red flag. Lying on the application is an indication that the applicant is not trustworthy. You need to do some background checking by calling the potential tenant’s employer to verify if they work with them, and if possible, their income.
Take caution when dealing with self-employed applicants. You can’t just take their words for it. Ask them to show you six months of bank statements, three years of tax returns, and a savings account with at least three months rent in it.
4. Longevity
Lastly, you should lookout for those traits that express longevity. It is not easy to secure a high-quality tenant, and once you secure one, you don’t want them to slip off your finger within a year or too. So lookout for something that ties them to the area. Factors such family and job are things that can make a high-quality renter stay longer on your property.
Once you have secured a high-quality tenant on your property, you may want to offer them incentive so they won’t leave in a hurry. The incentive can come in many ways. You may decide not to increase the rent or you may offer to improve the property’s interior in some ways.
The bottom line
If you don’t want to struggle with your home renter business, it’s time to decide which tenant you want to give your renter property to – bad tenants or high-quality tenants. Make the decision that will grow your business. Let DoryAngel Property managers choose the best of tenants for your properties.
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