According to a survey done by LeaseRunner, an online leasing company, 60% of landlords and property managers who participated in it, agreed that finding the right tenant is the most challenging task involved in the rental real estate business.Those who have been a part of the rental real estate, would not doubt the truth of the aforementioned statement. Determining whether a tenant is 'right' for you and your property is not easy, because it is humans that we are dealing with and not a product. What seems to be right may turn out wrong, and vice versa. Just meeting the prospects is not enough, especially when everyone would show their best side to you when they are desperate for a shelter. A lot of vague promises would be made, most tenants would appear to be wearing a halo on their heads, but you must investigate further to separate the weeds.
The following section contains some helpful information regarding the necessary steps you would need to take, in order to attract and select an appropriate tenant for your property.
Ways to Find a Good Tenant
The first step of the process would be to start researching about the laws related to the process. It would be extremely beneficial to acquaint yourself with the basic rules and code of conduct. For example, it is against the law to refuse a prospect due to their sex, color, race, religion, nationality, and other factors covered under the Fair Housing Act. Each state has its own set of rights. A detailed information about the same can be accessed by visiting the U.S. Department of Housing and Urban Development site online. Make sure that you go through these guidelines before starting the process.
In order to attract the right tenants, you must also advertise your rental property in the right manner. The word of mouth is not enough, you need a planned and systematic approach. Start by cleaning or, if needed, renovating the property to make it look like a tenant's dream. Use a quality camera (and not your cell phone) to click some high-definition pictures of the different sections of the property, with a description highlighting the plus points of the area. Post this information online on trustworthy websites such as, Rentals and rentalhomesplus, as suggested by the United Services Automobile Association (USAA). You will have to pay a nominal fees to post your advertisement on these sites, but they will save you from scammers who tend to haunt the free sites. You may also use print media, and publish your advertisement in the local newspaper or use fliers. Letting out the word on social networking websites such as Facebook and Twitter would also be worth the effort.
Rental Policy Sheet
It would be wise to prepare a rental policy sheet beforehand that clearly states the terms and conditions set by you for the tenants. For example, if you don't want pets in the house, or have a minimum lease term, then it would be best to mention it before applicants get in touch with you. Also, it would be worth mentioning in the sheet regarding the renters' insurance, which would be helpful in case of any property damage.
Rental Application Form
A good way to narrow down your search would be to use the rental application. It is a form that contains all the necessary details that you would need to determine if meeting the applicants would be worth your time; let's agree to it, we all tend to use our first-impression based intuition to choose and not choose between options, don't we?
This form requires the potential tenants to fill important information such as, previous addresses, income sources and figures, social security numbers, employer's information, references that do not include family members, and so on. The templates for the same are available in plenty online. Just go through the templates, and print the ones that seem to be most appropriate for you. There is usually a non-refundable processing fee ranging from USD 20 to USD 40, depending upon your state. The applicant must be willing to pay it, even if their application is rejected in the future. The party unwilling to do so is not worth consideration.
This is the most essential step in the process. The only way you'll be able to differentiate the suited prospects from the rest is through a thorough background check. You may either ask your real estate agent to do it for you, or get in touch with various organizations that provide these services at a certain cost. There are many online sources, such as Credit Investigators USA that will help you in the complete screening process. This will include checking for criminal records, bad credit history, previous addresses, employer's information, verification of the current income, and so on. It is best to go for tenants with a stable job and income. Those who hop from one job to another are not the most reliable options for renting out your property. Don't forget to speak with the previous landlord(s) to get a glimpse of what it would be like to be in their shoes.
After you have verified the authenticity of the information provided by the prospective applicants, it is time to meet the party and get the lease agreement signed. However, experts in this area suggest to take a deposit check from the shortlisted tenant beforehand, and wait for it to clear. Delay the signing of the agreement till that time. It is suggested to take an amount higher than the decided rent as the deposit amount, to avoid any sort of confusion for the tenants. Make sure that the lease agreement has all the details about the terms and conditions, payment details, eviction policies, and so on. Like the rental application and policy sheets, templates of lease agreements are easily available online.
As a property owner, your responsibility doesn't end here. Remember, at the end of the day, we are dealing with humans with different mentalities and perceptions. While you have done your best to find out the most suitable tenant, it is strictly advisable to visit the property at regular intervals―probably to collect your monthly rent―to see how the space is being kept. This 'somewhat-bothersome' step could save you a lot of money, as there have been many instances wherein landlords have found out significant property damage over the months passed, and had to incur additional expenditure due to the same.