You’ve decided to invest in rental property. Now it’s time to make sure that you get the right type of tenants. You could place ads in the local newspaper, but that could open you up to some serious problems. Choosing the right tenants can be stressful and time-consuming. Here are a few things to look for when considering potential tenants.
Personal references are the quickest way to weed out undesirable tenants. When you’re renting out your property, be sure to ask for at least three references. The inability to provide references may be a red flag that you should dig deeper. Failure to include at least one previous landlord as a reference may also be a red flag. To gain a better picture of the people who are applying for your property, you should look for references from the following types of people:
While bad credit doesn’t automatically mean a person will be a bad tenant, it does mean that you should take a closer look. Bad credit such as late pay on bills may merely signify that the applicant hit a rough patch at some point in their life.
However, if their credit report shows late pays on rent, evictions, or collection accounts for utility bills, you might want to consider a different tenant. It’s a good idea to allow prospective tenants the opportunity to explain their credit problems.
Questionable Employment History
Applicants who are unable or unwilling to provide a complete employment history may not be the best suited tenants for you. When asking for employment verification, you should request the most current paystubs. If you have concerns about their employment, it’s best to ask for original paystubs since copies can be altered.
Applicants that are self-employed may not have paystubs. That doesn’t mean you should avoid renting to someone who is self-employed. There are ways to confirm income from self-employment. For instance, you can request previous tax returns and 1099 tax forms. Current bank statements will also verify the amount of income that is deposited each month.
Now that you own rental property, you want to make sure that you get the best tenants. Using these simple guidelines will help you weed out the questionable applicants. If you have problems finding acceptable applicants, you might want to consider hiring a property management company. They will be able to take care of the application process, including background and credit checks. For more information, contact a business such as Harland Property Management.