Maybe you made a decision to become a Landlord as a part of your real estate plan for creating long term wealth, or maybe you became a an accidental landlord.
Regardless of how you came to acquire this age old title…there are some basic rules that if followed can make your “landlording career” easier and more profitable.
Landlords can be traced back as far as we have recorded records…and we can even speculate that some entrepreneurial cave man may have seized the opportunity to rent out an extra cave or two in exchange for animal skins, food or other useful items. Of course you can also imagine that evicting dead beat or undesirable tenants was far easier in those days. Just showing up with a big club would empty the cave very quickly.
But in today’s society with tenant laws protecting the rights of the tenant, removing bad tenants from a property can be a long, stressful and costly process. Visit eviction court and you will hear many horror stories about property damage and lost income from non payment of rent. The way to win the game of landlording is to do a better job of selecting tenants.
Here are some tips to use when selecting tenants.
1. Listen for verbal clues in the initial conversation about their relationship with current landlord, why they are moving, are they giving a notice, job, family, pets, community involvement, education, hobbies etc.
2 Make sure you maintain control from the first contact. The tenant should earn the right to live in your property. Many landlords give power to the tenant by renting on the spot just because they have the first months rent in hand.
3. Require an application to be submitted in advance and check rental references, and criminal records for each person living in the property. Incomplete applications will not be considered.
4. The tenant’s application must be pre-approved .The tenant may drive by the property but I suggest never showing a property until the application process is complete.
5. Get written references whenever possible. Tenants with no rental history usually do not work out well.
6. Tenants must be employed and must prove that their income is enough to cover the rent. Require pay stubs for at least three months to verify consistent income. Contact employer to check their attendance record.
7. Visit the applicant’s current home. Even a quick drive by can be enough to see what your property will look like after they move in.
8. Tenants must have the rent in full plus the deposit at the time they sign the lease. You may choose to give a small discount for early payment but always charge the maximum late fee allowed by law.
Being consistent, taking time to verify information and choosing the best tenant for your property based on the information you have gathered will increase your odds of choosing a good long term tenant that will make your landlording headaches disappear.