In an ever-fluctuating housing market, more and more people are looking to rent a home instead of buying one. As a property owner, capitalizing on this growing industry is a great choice to earn a little extra money.
Unfortunately, finding a good tenant can be harder than it should be. Even when a seemingly perfect tenant knocks on your door, a background screening can reveal your worst fears. At the end of the day, it can be hard to differentiate between good tenants and bad tenants when you’re eager to rent out your property.
To find quality tenants to move into your abode, consider these tips and tricks.
Good credit is a must
Even though a potential tenant seems affable, responsible, and trustworthy, you never know what could be revealed during a tenant screening. This is an essential part of the renting process, because it ensures your tenant has a reliable salary, a clean history (including criminal records), and, most important, good credit.
Credit is established when tenants pays their bills on time. A series of missed payments, defaulted loans, and accumulating debt can damage credit scores considerably. If tenants have poor credit, it implies that they won’t be able to pay you on time. This could put you in a struggling financial situation and might even land you in court should your tenants not pay what’s due.
A good rule of thumb is to ensure your tenant’s monthly income is three times greater than the cost of the monthly rent. You can help establish a good price for your property with a sound financial adviser. They utilize countless tools, including an inspection, a reverse mortgage amortization calculator, and more to ensure your property is rented for a fair price
Follow the law to a T
If you think renting out your property is as simple as posting a few ads online, you’re sorely mistaken. Landlords must give any potential applicant a chance, regardless of race, national origin, sex, ability, familial status, or religion.
On top of that, a renter must follow the rules of renting at the federal and state levels. Refresh yourself on the Fair Housing Act to assure that you’re in accordance with the law in your state. You can find more information on the US Department of Housing and Development’s website.
Draw out a comprehensive lease
All landlords should draw out an in-depth lease stating all the rules, limitations, and acceptable activities for their rental property. Stating your expectations from the start keeps a tenant from taking advantage of your living space. It also serves as a legally binding contract should your tenant perform any of the activities barred from the premises.
For example, many landlords are not pet-friendly. Should you discover a dog or cat on the property after you stipulated this rule in your lease, you have the right to take legal action against your tenant. Such contract details not only cover your legal rights as a landlord, but also ensure that you and your potential tenant are on the same page from the beginning. Should a potential tenant have an issue with any aspect of your lease, you can strike a deal or look for another tenant.
Advertise with intent
Simply posting a free ad on Craigslist might make your rental property look untrustworthy. When you want to find quality tenants, rely on quality forms of advertising. Try taking an ad out in the newspaper or broadcast your property on local media. While this might cost a little more out of pocket, you can usually mitigate this cost by charging about $50 per rental application you receive. By the time you find the perfect tenant, you will have made enough revenue from the application process that the cost balances out in the end.
Your advertisement should also work hard to appeal to renters. Simply stating the price and location isn’t enough. Nowadays, renters want to know whether a location is pet-friendly, if utilities are included, and if great local schools or activities are nearby. Highlight the assets of your home to appeal to more potential renters.
Renting your home doesn’t have to trial and error. When you want to find the perfect tenant, rely on these strategies to do the heavy lifting for you.
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