Investment properties like rentals can be a very lucrative and rewarding experience. This particular market can have a lot of benefits, especially in the fact when things go well, income can passively be coming in through rent payments. While there are a lot of benefits to becoming a landlord and owning investment properties, this is not a job for the faint of heart. Owning properties that you rent out can come with a hefty amount of work and responsibility.
One of the most important factors to this kind of business is always going to be the tenants that you rent your properties out to. Yes, maintenance on the properties will always be a factor no matter how perfect your tenant is, however, the people who live in your homes play the biggest role in your experience as a landlord. If you have been thinking about investing in rental properties, here are some of the things you should always keep in mind when vetting possible tenants!
Credit Report is Key
One of the most important factors to the modern consumer in today’s economy is their credit score. A credit score indicates a record of financial history that is important for landlords to have access to. A tenant that is going to be a good investment in your rental property will have a good credit score. Yes, there are always unfortunate situations that may cause a credit score to not indicate the actual level of financial discipline and responsibility of a tenant. In these situations, you can create plans that allow for exceptions, however, by and large, a credit score is an important part of the tenant vetting process.
A good credit score shows financial responsibility and that is very important to ensure when placing people in your rental properties. In-house credit reporting is a great service to use for rental properties. Finding a credit report service for business, allows you to have some unique advantages.
First off, it allows your possible tenants to have their credit scores checked from the convenience of your website. Secondly, it helps you and your marketing team focus on tenants that can be pre-approved quickly. This helps to sort through the possible tenants and quickly identify leads that are serious and qualified for your rental properties. This can allow you to quickly find the right kind of people to place in your rental units and help you cut down on unnecessary work.
Another thing that in-house credit reporting services can do is actually improve your tenant experience. For tenants that are looking at several rental options, finding ways of improving their experience can help to pull in potential, high-quality tenants.
Another important part of vetting tenants to ensure that you are making the best decision is to look for relevant tenant history. Requiring a history from your potential tenants of where they have rented in the past and what their experiences have been can be a powerful insight. This can help you make an informed decision that you feel good about.
One way of taking this further is to require not only past renting information but contact information to agencies or past landlords that they have rented from. This kind of information can be handled easily in the application process. Knowing how their past renting experiences have gone, and being able to reach out to past landlords can help give you a better picture of who you could potentially be renting your properties out to.
Owning a pet has recently become more popular than it ever has been. Over the last couple of years, dog and cat sales have skyrocketed to historic heights. The freedom to own a pet has become a very big priority to a lot of potential renters, and this is something to be aware of.
Even when talking to potential tenants who don’t currently own a pet, the issue of pets and their viability in your rentals needs to be addressed head-on. Do your potential tenants plan on purchasing a pet in the future and do they understand the proper steps to go through in that event? This is important information to go over with the tenant before the paperwork ever gets signed!
How Many People Are Staying in Your Rental?
This is also important information to be sure and get clarity on. When renting out your property, it’s important to know the expected number of people who are planning on living in it. This will help you gauge the price you should be charging, to include the wear and tear that is naturally brought on by more tenants.
Learning how to successfully manage rental properties can be a richly rewarding experience. With accurate credit and financial information, a rental history, pet, and capacity expectations, you should have enough data to make an informed decision on whether a tenant is a good fit or not.