Choosing who leases your rental property is just as important as the property itself.
A rental property is an investment and the tenant is a crucial variable that can have major effects on your financial returns. Choosing a tenant can be stressful and intimidating.
Here is our guide on how to choose the best tenant for your rental property.
Check The Applicant’s References
Do your due diligence and research your potential tenant’s history. Ask prior landlords for details about their prior rental history. Previous landlords can tell you if they were a privilege to rent to or if there are any red flags.
It is always a good sign when the applicant has a good standing relationship with their former landlord. This usually means there weren’t any major issues during their residencies, such as property damage, late (or non) payments, or complaints from other tenants.
Conduct Background Checks
Most properties do a formal background check and usually charge the applicant a non-refundable fee to do so. This will bring up instances of criminal behavior, rental history, prior evictions, employment history, and credit report. Often rental properties will allow the fee to go toward the security deposit if the applicant is awarded the apartment.
Before running the background checks, decide on the minimum credit score and sufficient income for the tenant that would be acceptable for you. Being comfortable about a tenant’s ability to pay their rent and pay it on time is essential for a rental property management company.
Because of the Fair Credit Reporting Act, should you choose to decline the rental of a unit as a result of an applicant’s credit report, you will need to disclose this information to the applicant right away. For a deeper dive into tenant screening, read on here.
Ask Questions When You Meet Your Prospective Tenant
Get to know the applicant by asking important questions that could affect your rental property. If smoking is a deal-breaker, ask them upfront. Find out if they have pets, how many, and what kind. Ask them who will be living in the residence and if they have friends or family that possibly stay with them for extended amounts of time.
For peace of mind, you can also check an applicant’s social media pages for any red flags. If the applicant has a lot of pictures involving house parties, this may be something to take into consideration.
How Do You Choose Who Gets the Rental Property?
Who is awarded the rental property if more than one applicant meets or exceeds the criteria?
If the competition for the rental property is too close to call, a lot of landlords will follow the “first come first serve” method, and grant the lease to those who contacted them first. Another option is to lease the unit to whichever applicant is available to move in the soonest.
For more information on how to choose the best tenant for your rental property, check out our blog, or contact us with specific questions.