Renting a home can be a very stressful process. It really does not matter if this is your first experience dealing with the alien life form known as “tenants” or even if you are a professional tenant handler – it always is something we want to get right the first time around.
The right decision can lead to nice residual income and someone to pay for our investment. While the opposite can lead to paying the mortgage and dealing with some one you can’t wait to get out of your poor little home. I have four issues or concerns to consider when you take the plunge into finding a match for your rental property.
1.) Do not allow potential tenants to bring down your home.
So you posted your home on the internet and got a few hits you talk to a couple of potential tenants and they say they will drive by, but you get the feeling that they won’t. Then your phone rings and the couple that is on the other end asks, “So can we meet up today ummmm around 6pm?” You say sure and are there by 5pm to spruce the place up, sweep, and get it in showing shape and find you’re by yourself when 7pm rears its ugly head.
This brings to your mind the fact that you have been stood up and have wasted a couple of hours by having a private house showing to yourself. So you get another call and they set up an appointment and are there on time. You greet them, make small talk, and open the house for them, and the barrage begins. These horrible people are just bashing your property and are dropping verbal nuclear bombs on all the work you done to the property.
The deposit is too much, the rent needs to be lowered, the neighbor has a dog, and the appliances are not up to date. The most common thing to do or is done by many landlords or property owners is to second guest themselves. You look around the house and find that everything with the home is wrong and you got to fix it because the prospective client said so. STOP!!
Depending on the comments you are receiving and the person who are making these comments they may have some truth in their critique of the home. If you don’t have smoke detectors and the fence is on the ground it is time to head to the local hardware store and get these issues resolved.
On the other hand if you have the home painted, working on getting the home repaired, and have did the most you can with your make ready budget move on! This is not the only person in your city that needs a rental. Remember you are looking for someone who wants to live in your home not needs to live in your home.
You should hear laughter, talks of where to place beds and dining room tables, you should hear the sounds of your property transforming from a vacant property into someone’s potential home. Look for the person who loves your property even for its flaws.
I always tell potential tenants rentals are not perfect, but it is our goal to make this property your home for at least one year and hopefully more. Renting a home should be as pleasant of a process as possible, so run away from complainers and run to people who compliment.
2.) Don’t take their word for it.
Often times landlords are looking to rent out a home as soon as possible, so we often skip on steps in the process. We need to understand a process is in place not to prevent but to help us find a great tenant. A tenant to us is a person or family that will love our home, take good care of it, and leave our pockets lined with cash around the first of every month.
With this being said it shocks me how many landlords and owners have no application process or evaluating procedures when it comes to potential tenants. We are having strangers move into our investment without knowing one single thing about them. This has to stop. Every bank in our country have procedures so should you. Here is a quick video for training and creating a tenant screening checklist – Important Steps to Proper Tenant Screening.
I am not saying that everyone is a cheat and a liar, and it is my personal hope and belief that there are more good people than bad people in this world. However, we have to have procedures in place of checking to see if a potential tenant fits our criteria of what a good tenant is. There needs to be an application the tenant fills out and preferably a professional company that runs their credit, criminal, and rental histories. This is in no way a clear cut answer to getting a perfect tenant, but it will stop you from getting some horrible tenants in your home.
I have ran applications on potential tenants to find out they just got evicted this month, have a felon, and have skipped out on every rental they had over the past two years. I use the application to see if they are honest and if I can handle their baggage. Some people deserve a second chance and if you are the one to give it to them that is fine, but if you are not that is fine to. Remember you are in total control of who you decide to live in your rental property.
You are allowed to deny an applicant for any reason as long as it does not discriminate based on sex, age, gender, or religious beliefs. One of the reasons I deny or accept tenants is based on their previous landlord’s reviews. If you get an instant “oh no that was a nightmare” type of response it is time to look for another tenant. I believe you should set your criteria for prospective tenants based on your comfort level and stick to it. Your criteria does not make you right or wrong it’s just what you are looking for in a tenant.
Knowing what your potential tenant should or should not look like on paper or an application will save you a lot of time and with practice lead to better tenants. You should never accept a tenant without running an application; it is about protecting yourself – not finding what is wrong with the applicant.
I’ll publish the next two points soon and as always thanks for reading. Successful investing!