If you’re a new landlord, you may be wondering what you should be looking for when it comes to renting to a prospective tenant – and how you can choose the right tenant for your rental property.
Doing so is not always easy, especially if you don’t have much experience renting to previous tenants. So, in this guide, we’ll take a look at a few of the things you should be looking for in a good renter, and we’ll also touch upon the subject of what you can – and can’t – take into account when renting to a tenant. Let’s get started.
First, Be Aware of the Law – and Illegal Discrimination
The law states that all landlords must treat their prospective renters equally. Because of the Federal Fair Housing Act, there are certain types of discrimination that are illegal when it comes to housing. The statutes are quite complex, but they boil down to this. You cannot discriminate based on:
- Race or skin color
- National origin/ethnicity
- Religious beliefs
- Familial status (families with children)
There are also some state-to-state fair housing rules that usually must be followed, such as nondiscrimination based on gender identity or sexual orientation. Take a look at this map for more details.
1. Strong Rental History
First things first, you’ll want to make sure that you get a clear picture of your past tenant’s rental history. Ask for a history of their previous rental units in your application, so that you can contact each one and confirm that they lived there.
Some landlords think that a tenant moving each year is a bad sign – but we don’t agree. There are many reasons that a tenant may opt to move often, and as long as they were a good tenant at each property, there is no reason to be wary of a long rental history, or numerous short-term rentals.
2. Good Credit
With the consent of the prospective tenant, you are allowed to check their credit report. Doing so is a good way to understand their overall financial well-being – such as their number of credit cards and outstanding loans, as well as any past issues like bankruptcies, repossessions, or judgments against them that may indicate financial trouble. While a high credit score does not guarantee that a tenant will be a great renter, it is a good indicator of overall financial well-being.
3. No History Of Past Evictions
Evictions are a major red flag against a potential renter, and a good reason to decide not to rent a unit to a prospective tenant. If you are in a housing market where it is difficult to fill your units, you may want to consider renting to a tenant even if they have been evicted in the past.
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But if you are not having issues maintaining proper occupancy rates, we would typically recommend avoiding tenants who have a past eviction – and tenants with multiple evictions, in particular. It’s just not worth the trouble.
4. No Past Criminal Convictions
You can use your best judgment, here. As a rule, it’s a good idea to try to avoid renting to individuals who have criminal convictions. But not all crimes are equally serious. A minor misdemeanor such as reckless driving or public intoxication, for example, is much different than a conviction for a serious, violent crime like assault or robbery. For your safety and that of other renters, we recommend avoiding renting to folks with past drug convictions, and convictions for violent crimes.
5. Stable, Predictable Income
As part of your rental application, you can ask for information such as pay stubs and proof of income, so that you can verify the income of your tenant, and whether or not they will have an easy time making rent.
The rule of thumb is that a tenant’s annual income should be about 40x the monthly rent – so for a unit that costs $1,000/month, the combined income of all tenants should be at least $40,000. While this is not a “hard and fast” rule, it helps you avoid situations where tenants rent a property that is too expensive for them – and then have trouble paying rent.
6. Good Communication
Throughout the process of meeting a potential renter, taking them through your property, and communicating about applications and other details, you should pay attention to how well they communicate. An applicant who is fast to respond and quickly answers phone calls, texts and emails will be a good tenant.
This is because communication is one of the most important parts of a tenant-landlord relationship. Once you’re renting to a tenant, you want to be able to communicate with them quickly and get a response as soon as possible.
For example, if you’re using DialMyCalls to send out a notification about an upcoming maintenance task, or to share information about emergency weather – such as a cold snap that may freeze pipes – you want your tenants to respond quickly! Good communication can also help with timely rent payments, apartment showings, and much more, so be on the lookout for communication skills when interviewing renters.
7. A Strong First Impression
In the end, your best judgment is a good way to determine the character of a potential tenant – along with all of the other factors mentioned above. A tenant who appears well-put-together, dresses well, and responds to messages quickly – and puts in an application as soon as possible – is likely going to be a good tenant.
On the other hand, a potential tenant who is hard to work with, makes a bad impression, and does not appear to be putting much thought into the process of applying for an apartment may be a bad tenant. By combining your overall impression of a renter with the above factors, you’re sure to be able to make the right choice.
Know How to Find Good Renters – Follow These Tips!
As you become a more experienced landlord, you’ll find that many of these tips become second-nature, and you’ll quickly be able to determine if a tenant is a good fit for your property. But until then, feel free to reference this guide for assistance!
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