However, there are several ways to scope out the best ones when investing in residential property. Consider the selection process just that – a process. More importantly, think of them as a series of checks. Checks that will eventually lead you to the good tenants. Follow these procedures step by step, and you’ll be able to hone in on the very best tenants to choose from for your investment property. Remember to utilize the steps together to better form an accurate picture of the tenant you’ll be installing in your unit.
The prospective tenant will need to first grant you approval to run a background check on them. You don’t even need to find a special company for this service anymore. Many web sites are available today to provide the service. And the fees they charge are minimal. With a background check, you’ll be able to determine if a prospective tenant has any criminal convictions in his past that he or she is not telling you when asked. If so, you can then determine if the convictions are problematic or not. Keep in mind, no one is perfect. Mistakes from the past should not necessarily haunt someone moving forward with their life. As long as there is no potential for economic loss due to a prior criminal conviction, and assuming they told you about these convictions when you asked them, tenants should be considered honest and reliable. They should not be disqualified straight away for any past wrongdoings.
Likewise, with a credit check, you need to have the prospective tenant grant you access to have one run on them. And this should be in writing. Once approved, credit checks can also be done very simply on the internet. There are numerous sites that provide the service. A credit check may be the best way you can tell if a potential tenant will pay on time, like clockwork every month – or whether you’ll get stuck with a headache – and a possible bad tenant that may require an expensive eviction process. The credit check is your absolute best measure against an eviction process ever occurring. Root out potential bad tenants before you ever make an offer to them, and have them sign a lease! You don’t want to ever get stuck in that kind of financial and emotional bind.
Make sure you always speak with a prospective tenant’s prior landlord. You need to hear from the horse’s mouth that they never had any problems with late payment of rent or any destruction of property. Or accidents as well. It’s always important to find out if a tenant sued a past landlord! Even if the tenant was in the right, you’ll want to know if you have a litigious sort on your hands. In addition, make sure you check their work references. How long have they been at their current job? Do you feel reasonably secure they will be keeping their job long into their tenancy with you? And, of course, do they earn enough income to support your rent? These are the kinds of simple, basic questions you need to get answered when running reference checks on potential tenants.
Add the checks together
Remember to look at the entirety of all these types of checks, and the information you garner from all three sets for any given prospective tenant. Once you’ve ascertained this data, you’ll be able to get a clear picture of who the best tenants are to install in your investment property. Don’t rely on any one check. Make sure you utilize all three in concert with each other to make the best, truest selection from all available applicants.
photos courtesy of rentseeker.ca, victig.com, mcclurepropertymgmt.com, readharding.com.au, clickpropertymanagement.co.nz, brookdale-pms.co.uk