Finding and Screening Tenants for Your Rental Property
Picture this: that property you bought isn't renting like you thought it would. You don't really know anything about renting property, so you decided to rent it out to the first person who showed you some money. You didn't check with their other landlords, or even follow through with a credit check. After all, most people are honest and what could possibly go wrong?
Plenty. We found ourselves in a situation where we rented to a girl who later threatened her roommate with a knife. We had to get the police involved to separate them. Obviously the roommate moved out immediately, but the troublemaker stayed and refused to pay any rent. We wanted her out, but it wound up taking three months before we could successfully evict her. Despite sending a collection agency after her, we never received any rent money that was owed to us.
As you can imagine, we've taken great pains to find good tenants ever since. Here's the overall process:
- Step 1: Prepare the unit for showing
- Step 2: Get your paperwork in order
- Step 3: Research the market rents and place your ad
- Step 4: Show your space
- Step 5: Choose your new tenant.
Step 1: Prepare the property for viewing by prospective tenants
Nice people like to live in nice places. A good renter can afford to be little choosy, so you want to make sure they choose yours by making it look as inviting as possible.
Easy fixes for your property include:
- repair any cracks or holes and apply a new coat of paint on all walls
- make sure all the little things like lights, appliances, doorknobs and sockets work the way they're supposed to
- create a checklist to use when the tenant moves in and out. Include details for everything in every room and the current condition- doors, windows, drapes/blinds/shutters, plugs and light switches, shelving, appliances etc.
- make sure the unit smells fresh. Open up the doors and windows to let fresh clean air in.
Step 2: Make sure you have your paperwork ready
To attract a good tenant, you will need to be a professional landlord and have the right paperwork on hand. Contact the local residential housing branch of your government or go online and do a search for landlord forms to find the following:
- application forms for tenants
- leases
- eviction notices and similar forms that you may need in the future. It's best to have them right away so you don't have to scramble to get them in the future if you really need them.
Remember to make sure you've got the forms that are legal for your area. Every state or province has it's own forms.
Step 3: Set your price and start advertising
Make sure the Price is Right!
The perfect price is actually one that is a little bit below market value. This will attract more prospective tenants, ensures your property rents faster, and you will have a much better chance of keeping tenants for a longer period of time. To find the "perfect price", research similar units in the newspapers and using online rental databases.
Get the word out! We've found tenants through all of these methods:
- e-mail all your friends and family and let them know about the property that you have that available to rent. They might know someone who knows someone who is looking for a new place to live
- use online advertising
- in a readily seen spot on the property (on the lawn or in a window) put up a sign with a phone number
- local newspapers can be a fairly inexpensive way to advertise. Ask the classifieds agent what day is the best for advertising to ensure that you have the most eyeballs seeing your ad
- advertise at local colleges and universities. They always have a bulletin board to post on.
Step 4: Showing your space
The tried and true method of showing your property is with the classic open house. You should plan times for two open houses in case the first open house doesn't produce a good prospective tenant. Open houses should usually last about two hours and be held in the evening or on a weekend. When someone wants to see the unit, tell them about the first open house and let them know that there might be a second open house.
Be dressed in business casual attire with tenant application forms on hand when you greet the prospective tenants.
Open houses are great, as they can create an atmosphere of demand. Knowing another person may want to rent the apartment makes others feel that they should want it too. Urge people to complete an application form before they leave so that you can write your impression about the prospective tenant right on their form.
Step 5: Choose your new tenant
- review the applications. Look for gaps where a place of residence is not indicated, or look for conflicting information
- run a credit check. Once you've found one or two people that you like and that have a good application, run a credit check. This is a critical piece. Many veteran landlords say they just trust their gut. Well, I trust my gut, and then verify it!
- reference checks. Be diligent when doing reference checks, asking questions like "Would you rent to them again?", "What is your current relationship with them?" and "How long have you known them?"
- listen to your gut. Do you have a good feeling about them? Despite everything else looking great for a tenant, you can usually trust your gut to indicate if you feel that something is wrong. If nothing feels wrong then you might have found your new tenant.
Now that you've chosen your new tenant and they have paid you, make all the other possible tenants aware that the unit is no longer for rent. If they ask you why they weren't selected, it's best to just say "the other tenant had a very strong application". Never say that they were not selected based on factors such as age, race, religion or whether or not they have pets or children. This will help avoid bad feelings (and possibly even a lawsuit). - 23162
Plenty. We found ourselves in a situation where we rented to a girl who later threatened her roommate with a knife. We had to get the police involved to separate them. Obviously the roommate moved out immediately, but the troublemaker stayed and refused to pay any rent. We wanted her out, but it wound up taking three months before we could successfully evict her. Despite sending a collection agency after her, we never received any rent money that was owed to us.
As you can imagine, we've taken great pains to find good tenants ever since. Here's the overall process:
- Step 1: Prepare the unit for showing
- Step 2: Get your paperwork in order
- Step 3: Research the market rents and place your ad
- Step 4: Show your space
- Step 5: Choose your new tenant.
Step 1: Prepare the property for viewing by prospective tenants
Nice people like to live in nice places. A good renter can afford to be little choosy, so you want to make sure they choose yours by making it look as inviting as possible.
Easy fixes for your property include:
- repair any cracks or holes and apply a new coat of paint on all walls
- make sure all the little things like lights, appliances, doorknobs and sockets work the way they're supposed to
- create a checklist to use when the tenant moves in and out. Include details for everything in every room and the current condition- doors, windows, drapes/blinds/shutters, plugs and light switches, shelving, appliances etc.
- make sure the unit smells fresh. Open up the doors and windows to let fresh clean air in.
Step 2: Make sure you have your paperwork ready
To attract a good tenant, you will need to be a professional landlord and have the right paperwork on hand. Contact the local residential housing branch of your government or go online and do a search for landlord forms to find the following:
- application forms for tenants
- leases
- eviction notices and similar forms that you may need in the future. It's best to have them right away so you don't have to scramble to get them in the future if you really need them.
Remember to make sure you've got the forms that are legal for your area. Every state or province has it's own forms.
Step 3: Set your price and start advertising
Make sure the Price is Right!
The perfect price is actually one that is a little bit below market value. This will attract more prospective tenants, ensures your property rents faster, and you will have a much better chance of keeping tenants for a longer period of time. To find the "perfect price", research similar units in the newspapers and using online rental databases.
Get the word out! We've found tenants through all of these methods:
- e-mail all your friends and family and let them know about the property that you have that available to rent. They might know someone who knows someone who is looking for a new place to live
- use online advertising
- in a readily seen spot on the property (on the lawn or in a window) put up a sign with a phone number
- local newspapers can be a fairly inexpensive way to advertise. Ask the classifieds agent what day is the best for advertising to ensure that you have the most eyeballs seeing your ad
- advertise at local colleges and universities. They always have a bulletin board to post on.
Step 4: Showing your space
The tried and true method of showing your property is with the classic open house. You should plan times for two open houses in case the first open house doesn't produce a good prospective tenant. Open houses should usually last about two hours and be held in the evening or on a weekend. When someone wants to see the unit, tell them about the first open house and let them know that there might be a second open house.
Be dressed in business casual attire with tenant application forms on hand when you greet the prospective tenants.
Open houses are great, as they can create an atmosphere of demand. Knowing another person may want to rent the apartment makes others feel that they should want it too. Urge people to complete an application form before they leave so that you can write your impression about the prospective tenant right on their form.
Step 5: Choose your new tenant
- review the applications. Look for gaps where a place of residence is not indicated, or look for conflicting information
- run a credit check. Once you've found one or two people that you like and that have a good application, run a credit check. This is a critical piece. Many veteran landlords say they just trust their gut. Well, I trust my gut, and then verify it!
- reference checks. Be diligent when doing reference checks, asking questions like "Would you rent to them again?", "What is your current relationship with them?" and "How long have you known them?"
- listen to your gut. Do you have a good feeling about them? Despite everything else looking great for a tenant, you can usually trust your gut to indicate if you feel that something is wrong. If nothing feels wrong then you might have found your new tenant.
Now that you've chosen your new tenant and they have paid you, make all the other possible tenants aware that the unit is no longer for rent. If they ask you why they weren't selected, it's best to just say "the other tenant had a very strong application". Never say that they were not selected based on factors such as age, race, religion or whether or not they have pets or children. This will help avoid bad feelings (and possibly even a lawsuit). - 23162
About the Author:
Learn How to Retire with Real Estate with Dave's free Real Estate Investing Starter Tips Guide. Learn how to find money for real estate purchases, create financial freedom, positive income and massive wealth with tips like: How to find quality investment properties, find good tenants and keep them, and easy ways to make more money with real estate.
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