Finding a great tenant can be crucial to the value of your rental property when it’s time to re-rent or sell. A dream tenant is the one that pays rent on time and maintains the property in great shape during their occupancy. In order to find such a tenant you need to have a plan or a professional property manager. Here are some key things you should consider when looking for the “perfect” tenant:
- LOCATION: You can’t change the location of your property (unless it’s a mobile home). A good neighborhood will attract good tenants so take this into consideration as you buy your next rental home.
- PRICE: Make sure you price your home slightly below market value. This will give you an edge over your competition by attracting more tenants to your home and giving you the option to choose the best one. Just remember, you lose 5% of your annual rent for every 2.5 weeks the property sits vacant.
- MAINTENANCE: Make sure that your house is in great shape. Do preventative and cosmetic maintenance as required. Nothing scares tenants more than houses that have old worn out carpet, leaky faucets and run down appliances.
- TENANT SCREENING: There is more to tenant screening than just a credit check. With the current rise in foreclosures and short sales, more people have bad credit but make great tenants. When screening tenants make sure to not only check their credit but also their employment history and past rental or mortgage history. Early problem signs include short term jobs and repeated late payments on credit cards, car payment or rent/mortgage without an excruciating circumstance. Make sure to scrutinize past problems carefully and interview each tenant.
- LEASE: Make sure to follow local laws and prepare a lease accordingly. Important stuff like rent due date, lease termination, security deposit and late fees are clearly written and understood by the tenants. You should also have clear guidelines for who is responsible for repairs and maintenance. I also require that my tenants provide me with cashier checks or certified funds rent, security deposit and application fees so I never have to worry about a bad check.