Choosing the Best Tenant for Your Rental Property
Finding the perfect tenant is crucial. It’s either you get to choose a good one which is more profitable. Or you can pick a bad tenant that will cost you more than you gain.
A property managing company like Winfield property management knows how to screen a good tenant. They also have established policies and procedures that ensure the tenants are being assessed well. But if you want to do the work alone, you may follow this guide to choose the best tenant for your rental property.
1. Setting the Right Criteria
Setting criteria is important before you search for new tenants. It will make you well prepared when the application came. This will also help you in choosing the right tenant among the applicants. This will make the screening process effective and pretty much easier. How to set the right criteria? Here are some of the recommendations:
- Tenants should make enough income to afford the rent.
- They should have a stable income or a co-signer that earns enough to pay the rent
- Pays rent on time before
- Easy to work with and approachable
- No criminal record
2. Create a Detailed Rental Application
A rental application can help you screen potential tenants. After setting the criteria, you may include it in the application. It will make your work a little bit easier. You have to be very crucial in making the application. Asking the wrong questions in the application may lead you to the wrong tenant. And we know that you don’t want it to happen. Here are some questions that you may focus on in making the rental application.
Include character references in the application. Preferably those that are not related to the applicant. Through this, you can call the references and ask them about the applicant. You can even ask why the applicants are moving and other questions that will help you get to know your potential tenant.
Employment and Rental History
You can include employment history on the application. You can see here how often the applicants switch jobs and it doesn’t matter if they have a lot of employment. This will give you an idea of whether or not they are a reliable investment.
Rental history will give you an idea about the applicant’s previous standing when it comes to payments. You can also ask their previous landlord the status of the house, and other issues that you should know about.
3. Credit and Background Check
Checking the credit will determine if the potential tenant is financially responsible. This information is very important because you can get a sense of how financially able they are. And also if they can pay their rent on time. You can also verify their employment and income. You can do this by calling their employer to confirm that your potential tenant works there.
General rule for income is that your tenant should be making 3 times as much as the rental cost. You can also check the income-to-debt ratio of the applicant. If a tenant earns a high income but has a lot of debt too, choosing them might be risky than those who earn an average salary and has no debt. You have to make sure that the tenants you’re going to choose can afford your rental property. The very reason why you want someone to rent your place is because you want to earn.
Aside from the credit check, it is also important to know if your tenant has a criminal record. You have to consider how severe the crime is and if they are still capable of doing it all over again. You don’t want to have problems in the future so make sure that you take background checking seriously. Worst, you can be held liable for choosing someone with a serious criminal record.
4. Follow the Federal Fair Housing Act
Everyone has the right to be treated equally. The Fair Housing Act was created to advise landlords, lenders, buyers, and renters of the housing practices that may be considered discriminatory.
The Federal Fair Housing Act is a law that is designed to prevent discrimination against certain classes of people. This includes race or color, national origin, religion, sex, familial status, and disability.
5. Need Help? Hire Someone Who Can Perform the Job Well
Do you find it hard to find the best tenant for your rental property? From checking hundreds of application to understanding what their credit check means. Finding the right tenant can be complicated. It is because screening for tenant is a complex job that needs professional skill.
This is where a property management company can greatly benefit you. They can actually help you in every aspect of being a landlord. From finding the best tenants and managing your property, they can be a big help so you will have more time for yourself.