(ThyBlackMan.com) If you’re looking to earn some passive income, investing in rental property is the way to go. Whether you’re a new landlord or have been renting your property for years, it’s crucial to know how to pick the perfect tenants to avoid any damages, complaints, and even lawsuits. After all, purchasing a rental property is a big investment, so you’ll want to protect it at all costs!
If you’re ready to quit your 9 to 5 and make a lucrative passive income, we’re here to help. Below, we’ll go over how to choose the perfect tenants for your rental property, so that you can keep unnecessary costs to a minimum.
Screen your tenants
The first step to choosing the perfect tenants for your rental property is screening them. Sure, a potential tenant may seem great in person, but you never know what they could be hiding. With a tenant screening service, you can gain valuable insight into the history of your applicants.
SmartMove background checks, for example, can give you a detailed report on your tenants, including:
- Credit history
- Criminal history
- Eviction history
- Employment history
- Income verification
Knowing your tenants’ history is crucial to ensure you pick the right ones. With a credit report and income verification, you can rest assured that you’ll receive your monthly checks in full and on time. And with a criminal and eviction report, you can be confident you choose a tenant who doesn’t have a past filled with theft, arson, or vandalism.
Advertise appropriately
Similar to how advertising is crucial to growing a business, advertising is essential for attracting promising tenants. The internet has revolutionized the way people browse and shop, but sometimes it’s worth it to do things the old-fashioned way. Instead of posting your property on Craigslist or Facebook Marketplace, buy an old-fashioned “For Rent” sign and place it in the front yard of your property. This will attract the attention of your neighbors and community members, who may give referrals to trusted potential tenants. Word of mouth can be a powerful tool, so if you need to get the ball rolling, reach out to those around you.
Interview potential tenants
Another important aspect of property investment is interviewing potential tenants to ensure your assets will be taken care of properly. After you post and advertise your listing, you’ll begin receiving applications online or in the mail. As you review each application, reach out to candidates you may be interested in. Schedule an interview to get to know the person or people better. This way, you’ll be able to put faces to names, and let them know your expectations. Some questions to consider asking include:
- Do you have pets?
- How long have you lived in your current home or property?
- Why are you moving?
- What is your job status and do you have a monthly income?
- Do you smoke?
- Have you ever been evicted?
- Have you ever broken a lease agreement?
- How many people are going to be living with you?
- Have you ever been convicted of a crime?
However, keep in mind that you should always adhere to occupancy regulations for your area or region. Asking certain questions, such as those regarding children, can be interpreted as discrimination against familial status. In most areas, this is illegal and can put you in the center of a troublesome legal dispute. It’s also important to remember not to ask questions regarding religion, disability, sexual orientation, and nationality, as these can also be interpreted as discrimination if you choose to deny the tenants afterward.
Trust your instincts
After you interview potential tenants, not only is it important to consider their income and criminal history, but it’s also important to go with your gut instinct. Someone might look good on paper, but if you notice something that’s off, it might be an indicator that some issues could pop up down the line. Whether you believe it or not, trusting your instincts is often very accurate. If you still feel weary or off, you’re probably right. If this is the case, sit down and take time to reflect to ensure you make the right decision.
Key Takeaways
Sadly, it’s all too easy to mistakenly choose a tenant who fails to pay you on time, causes damage to your property, or disturbs neighbors. But with these tips on how to choose the perfect tenant for your rental property at your disposal, you’ll be able to sleep soundly at night knowing you made the right decision.
Staff Writer; Steve Parker