The most challenging thing you will encounter as a landlord is tenant selection. The process is more of an art than a science. It’s a practice that requires landlords to be aware and flexible. Finding good tenants that will take care of your home is something challenging but very essential. A good number of seasoned landlords have found themselves stuck with irresponsible and unreliable tenants. Certain tenants can make your life as a landlord a nightmare while others will make you enjoy the fruit of your investment. As a landlord, your wish is never to encounter such kind of tenants. Taking the time to choose the appropriate tenant for your property will help protect your investment.
Look Into a Tenant’s Finances
Any landlords will wish to have tenants who are financially stable with good credit and rental histories. DON’T JUST LOOK AT A CREDIT SCORE! According to Dave Ramsey, the FICO score does not factor in income, debt-to-income ratio, savings account, or net worth. Credit scores are actually very lousy measurements of a potential tenant’s financial health.
Contact previous landlords, and ask for relevant documents. Tenants who are tasked with paying their bills are most likely to pay their rent on time. Additionally, they will take good care of your apartment. Before selecting your tenant, you should verify their income and run a credit check to find out if they have a good history of settling their bills on time. You can also screen your tenants to check their income-debt ratio.
Conduct a Criminal Background Check
JD Palentine says that every landlord’s screening process should involve a potential tenant’s “financial, rental, and criminal history” so that you can “predict whether he or she will be a good fit.” Performing a criminal background search before selecting the person to occupy your apartment is very important. Requesting for personal information about your leaseholders provides the perfect opportunity to screen your tenants with the help of security personnel where you can identify their criminal records. This helps you select law-abiding citizens who respect the property leasing law.
Always Use a Lease Agreement
Using a secure leasing agreement will set terms and conditions to be followed by tenants living in your house. The agreement may include facts such as rent due dates, the kind of people to live there, or penalties for late rent. A lease agreement will act as your security guard in protecting your property.
Always Request for Rental Deposits
Rental deposits will act as safety nets for landlords if they end up signing erratic tenants. Landlords should make it a rule to ask for security deposits from tenants before allowing them to settle in. Deposits help landlords in covering costs resulting from property damages and rental dues that may have effects on the overall income.
Considering the tenants selecting tips discussed above will help you as a tenant to choose the correct tenant for your property. With the right tenant, you will save time and money by avoiding non-payment, costly evictions, and property damage.