Even the most desirable rental property in the most desirable area won’t do much good if you can’t find the right tenants. Frankly, there’s little wonder as to why so many landlords feel like they’re taking a gamble every time they enter a lease agreement with a new renter. No matter how well someone presents themselves, there’s no guarantee that they’ll be a model tenant. Keeping tenants happy is key to making money from your rental, but you’ll need to do your due diligence to ensure they’re a good fit for your property. In the interest of minimising your chances of signing on with the wrong tenants, keep an eye out for the following qualities when reviewing applications.
A steady income – or lack thereof – stands to make or break a tenant’s ability to stay current with rent. So, when reviewing applications, look for prospective tenants who make at least thrice the cost of rent each month. This amount ensures that they’ll be able to afford rent and pay it promptly and comfortably. To play it safe, confirm that they make the amount listed on their application by requesting to see paystubs. Consider asking to see some recent utility bills, a phone payment, or lease/car payment receipts for the past few months. The idea is to establish a clear pattern of responsible, on-time payments and determine that they can hold fast to their financial commitments. Absent that, request the contact information of their employer.
Of course, this doesn’t mean that exceptions can never be made. For example, if someone is unable to work because of physical and/or psychological impairments or receives benefits, you may be able to work something out. Even if their monthly income isn’t quite the amount, you’re looking for, as long as it’s steady and enables them to pay rent on time, taking such applicants on as renters shouldn’t present much financial risk. Lone Star State landlords with Forney homes for rent would do well to regard steady income as a prerequisite for tenancy.
Solid credit is often a good indicator of a financially responsible applicant. Conversely, applicants with deeply troubled credit histories generally aren’t the safest bets. After all, if they’re unable to maintain decent credit, this should call their ability to keep up with rent into question. So, when reviewing applications, a credit check should be among the first steps you take. Keep in mind that a basic tenant referencing which includes a credit check will provide different information that will help you make a decision.
When going over an applicant’s credit, there are several things you should look for. For starters, do they have a history of paying bills on time? If the answer is no, this should be taken as a bad sign. Secondly, do they currently have a significant amount of debt? While virtually every American is saddled with some degree of debt, an applicant drowning in it might not make the best tenant. Third, are there any payment gaps? Keep an eye out for gaps in payments of credit card debt, loans or various other financial obligations.
Many applicants will list references under the assumption that you’ll never actually check them. Unfortunately, with many property owners, this is a safe bet. In some cases, an applicant will present themselves well enough that the landlord will regard checking references as unnecessary. Other times, landlords just don’t want to go to the trouble of contacting references.
However, a full tenant referencing will supply invaluable insight into a potential tenant’s financials and character.
Regardless of your reason for failing to contact references, laziness in this area stands to backfire on you spectacularly. References – especially previous landlords – can provide you with a plethora of pertinent info on prospective renters, which can help you determine whether they indeed are as responsible as they purport to be. For example, even if an applicant has excellent credit and a steady income, there’s a possibility they mistreated the last rental property they inhabited and left considerable damage in their wake. Among other qualities, you’ll want someone willing to care for the property and keep damage minimal to nonexistent. Sure, it’ll eat up a little time, but the simple act of checking references can save you years of headaches down the line.
Although rental property ownership is commonly regarded as a highly profitable venture, this is only the case when landlords can find model tenants. Tenants who are consistently late with the rent and fail to take proper care of the property are liable to cost you more money than they stand to make you. While there’s no magic wand solution for distinguishing bad tenants from good ones throughout the application phase, there are several ways for property owners to lower their odds of getting stuck with the former dramatically. Remember: a little bit of preparation goes a long way!