The right tenants can make or break your experience as a landlord.
Here are 8 tips on how to find good tenants.
Your landlord experience is only as good as your worst tenant. And we’ve all heard stories of bad tenants who are late on the rent, start feuds with the neighbors, and “accidentally” set fire to the carpet.
If you’re a first-time landlord, you might be especially nervous about the caliber of renters you might wind up with. Finding great tenant doesn’t happen by accident. It takes planning and foresight to attract your “Dream Renter.”
This article will give you some tips on how to find good tenants.
1. Be Fair
Every landlord has a list of certain things they will (and won’t) accept. But before you chisel that list in stone, you first need to understand which rules and procedures you’re legally allowed to set.
The Federal Fair Housing Act prohibits housing discrimination against tenants due to:
- National origin
- Family status
So while you might think the best tenants are retirees with no children, you can’t legally turn away prospective renters that don’t fit that narrow definition.
2. Take Care of Your Property
Great tenants start with great properties.
If your rental home has stained carpet, scuffed walls, and cobwebs in every corner, potential tenants will have a bad first impression. The good ones will be scared away and the bad ones won’t respect your property.
Investing in your rental property will set the expectation for how tenants should care for it. This doesn’t have to mean installing marble counters in every bathroom, but it does mean keeping up with comps in the area—both in terms of budget and upkeep.
Make sure the space is clean, well-maintained, and functional and your tenants will do the same.
3. Refine Your Rental Agreement
Your rental agreement is more than a legal contract. It’s the standards you’ve decided to set for your investment property.
Many of the fears you have as a landlord can be prevented by writing the solutions into your lease agreement. Don’t want a “revolving door” of tenants moving out every year? Offer a three-year lease. Don’t want dogs? Add a “no pets” clause. Shudder to think of a family of eight moving into your two-bedroom bungalow? Set a four-person occupancy limit.
Set high standards (and be strict about keeping them).
4. Don’t Rush!
It can be tempting to get someone into the space as quickly as possible so you can start making some income. But finding quality tenants takes time.
Remember, you’re looking for the best occupant for your home, someone who will treat it (and you) with respect. Ads for rental homes will bring both good and bad tenants out of the woodwork and you’re going to need time to sort through them.
That being said, you should rush to at least respond to prospective tenants in a reasonable amount of time. In some cases, the reason you’re missing out on finding good tenants could be because other landlords keep snapping them up.
5. Do a Background Check
When it comes to finding high-quality tenants, nothing can replace a thorough tenant screening! The more you learn about a tenant’s background, the better you can predict their future.
At American Home Team Realty, we use a 4-point background check that covers:
- Rental History
- Character Witnesses
- Criminal and Credit checks
It can also be a good idea to look them up on social media to get a feel for their lifestyle. (Hey, if employers do it, why shouldn’t you?)
6. Trust Your Gut
Ask prospective tenants to meet in-person so they can get a good look at the property and so you can get a good look at them.
You can learn a lot from a face-to-face meeting. For example, they might ask questions that set off some red flags for you (“Are you okay with me having a snake?”) or they may just seem uninterested.
In most cases, you might not get a significant “reading” on them, but if you see any red flags, you’ll know to keep looking.
7. Be a Good Landlord
Tenant retention is just as important is tenant acquisition. At the end of the day, your renters are customers and they can choose to take their business elsewhere when their lease runs out.
So when you find a great tenant, do your best to keep them!
Stay up-to-date on regular maintenance and respond to questions and emergency requests promptly. If you make living in your rental property a joy, no good tenant will ever want to leave!
8. Hire a Property Management Company
If finding (and keeping) good tenants sounds like a lot of work, that’s because it is. Being a landlord is far from passive income…at least, it can be without the right assistance.
Hiring a professional residential property management company can take a LOT of the stress out of finding great tenants who will pay their rent on time, get along with the neighbors, and take good care of the property. Property managers know how to find good tenants because they’ve done it many times over.
But their job doesn’t end once the tenants have moved in. Full-service property managers can take the work out of being a landlord so that you can enjoy truly passive income.
At American Home Team Realty, we understand the unique challenges involved in being a landlord: from figuring out how to find good tenants to finding ways to maximize your profits.
Odds are, you became a landlord because you thought it would be a lucrative source of passive income…only to find that your expectations couldn’t be further from the truth.
That’s where we come in.
American Home Team Realty offers full-service residential property management with a level of customer service that larger companies simply can’t match. If you’re looking for a way to take the burden of owning rental property off your shoulders (without getting rid of the income you enjoy), we’d love to meet you!