As a landlord, you’ll want to protect your investment, but at the same time, you don’t want your rental to be vacant for too long. Although you might be tempted to start earning and rent your property out quickly, you need to make sure that all your tenants are good tenants before you let them live on your property.
For instance, if you end up with a tenant who consistently fails to pay rent on time, you may end up having to evict them and start at square one again. According to a TransUnion survey, evicting a tenant may take up to 3-4 weeks, and costs an average of $3,500.
As a landlord, finding good tenants to rent your property is the most important phase of making sure your investment is safe and will be worth it. Your tenant is someone you will trust to look after your property, alert you when anything goes wrong with the home, and pay their rent on time every month.
With all of that said, here’s how to find good tenants.
1. Follow the Law
Landlords must treat all prospective tenants equally. The Federal Fair Housing Act was designed to prevent discrimination against certain classes of people in any activity related to housing.
In short, you cannot discriminate based on:
- Race or color
- National origin
- Religion
- Sex
- Familial status (families with children)
- Disability
Additionally, many states have their own Fair Housing Rules that you’ll need to follow.
2. Make Sure the Tenant Has Good Credit
You’ll want to make sure that the tenant is financially responsible. You’ll want someone who makes sure to pay their bills on time every month, as this signifies that they will also pay their rent on time.
Verify the prospective tenant’s income. Ideally, you will want to find a tenant whose monthly income is at least three times the monthly rent. You should also confirm their employment, length of employment, attendance record, and monthly earnings.
Getting a credit check has a fee, and sometimes landlords ask their applicants to pay the credit check fee as well.
3. Perform a Criminal Background Check
No matter where you are, criminal information is always public record, and it can be viewed at various courthouses. A background check will turn up both serious and minor offenses. You will need the tenant’s name and date of birth to run one.
Keep in mind that those with a criminal record may try to give you false information, so make sure to check a valid ID to verify that they are who they say they are.
4. Look at the Rental History
If possible, you should talk to at least two of the tenant's previous landlords. This is because if the applicant is a problem tenant, their current landlord may want to get the tenant off their hands and may not be as truthful.
5. Choose a Tenant Who Is Stable
On their application form, look at the tenant's previous addresses and employment history. Do they move or switch jobs often? If they move often, you might soon have a vacancy on your hands again. If they have not shown consistent employment, they may not be able to afford the apartment in a few months, and you’ll be left starting your tenant search from scratch or dealing with an eviction.
6. Trust Your Instincts
In the end, no matter how thorough your screening may be, sometimes your instincts are the best judge of character. For instance, one prospective tenant might look perfect on paper, but you might still feel that there is something off about them.
You might later find out that the tenant was only using someone else’s identity to apply for the apartment. Trust your screening and trust that it’s not for nothing, but don’t ignore your gut instincts, especially when a prospective tenant looks too perfect on paper.
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