Finding good tenants does not require magic or voodoo. Adherence to a trusted formula for tenant screening will ensure fewer headaches and lower expenses for landlords. My trusted formula can be described as 1+2+3+4+5. See below:
1) Be sure that you, the landlord, are legally protected. Because property rental is a practice that has been around for a very long time, legal frameworks that specify the relationship between landlords and tenants can usually be found wherever there is civilization. It is in any landlord’s best interest to become familiar with the local or state laws that govern this relationship and incorporate language favorable to the landlord’s business into a lease agreement. My recommendation is to retain the services of an attorney and ask them to draw up a legally defensible lease or use one that you know has been tested in court by another landlord recently. Also, because laws change periodically, be sure that your lease stays current with the landlord-tenant laws in your area.
2) Although it is typically not a legal requirement in most states, I require (per the lease agreement) that my tenants obtain renters insurance. In the greater scheme of things, it usually does not cost that much and it protects the tenant’s property should a major accident happen such as a fire, flood or theft. Renters insurance can also help to dissuade a misguided attorney, hired by the tenant, from filing a lawsuit against the landlord stemming from an accident.
3) The importance of performing tenant screening including credit and criminal history checks cannot be overstated. A potential tenant’s credit history and criminal background history speaks volumes about how they interact with society and how they will interact with you as a landlord. In my experience, a person who pays their bills on time and stays out of jail is usually trying to live harmoniously within society. These are the people you want as tenants. They are usually people who do what they say they will do and keep promises. As any landlord will find out, a tenant’s problems usually become the landlord’s problem as well eventually.
4) Property maintenance is an important aspect of property management. Be sure to keep your properties in a serviceable condition that is acceptable to your rental market. Doing so will attract more potential tenants when you’re trying to rent a property and will also help to keep the tenant happy while they are living there. Usually, a happy tenant will pay their rent on time and take care of the property to the best of their ability. Keeping the property in good condition will also fetch a higher price should the property need to be sold.
5) Be sure to get personal recommendations from previous landlords. A verified and truthful recommendation from a potential tenant’s previous landlord goes a long way with me toward determining how a tenant will perform the obligations of their lease agreement. You will notice above that I said “verified and truthful” when referring to the recommendation. Many undesirable tenants will enlist the help of friends and family to provide “recommendations” for them. From my experience, recommendations from friends, family and employers DO NOT qualify as “verified and truthful.” As a landlord, only consider people who have done business with the potential tenant in the past such as creditors or local businesses.
There are exceptions to all the points stated above but generally following these guidelines will make for a more pleasant experience as a landlord.Bruce Sutherland is a guest blogger from The Successful Landlord Blog. In exchange for sharing this content, the Allstate Community has compensated him via cash payment.