Finding the right tenants can be a difficult task for many landlords, but youíd be surprised by what a little bit of digging can do. Start your search by asking the right questions and screening your potential candidates.†
From there, you should be able to pick and choose the applicants that are right for you and your building. Here are some need-to-know tips to help you get started.
Begin by asking: Why are you moving?
This simple question isnít just an easy conversation starter, itís also a quick way to get info from your tenant without seeming too nosy or overbearing. Once theyíve told you their story, take a minute to think about their answers. Are they moving for work or family? Did they have a poor relationship with their past landlord or neighbors? Look for responses like the first instead of the latter.
Donít be afraid to ask for references.
References confirm whether or not a potential tenant is reliable and has a reasonable income. If the applicant decides to list a former landlord as a reference, thatís a major plus! This means the tenant has a positive relationship with their former landlord and will most likely be a good tenant for you, too.
Check their rental history.
Dig deep and look into their past rentals. If they werenít clear about why they left their previous home or if they didnít provide a reference from a former landlord, call around to see what happened. Thereís no harm in picking up the phone and asking a fellow landlord a few questions about your potential tenant.
Before you call, have a script or checklist on hand. At minimum youíll need to confirm the property address and when the tenant lived there, find out if the tenant was consistent with their rent payment, and see whether their previous landlord needed to withhold deductions from their security deposit. †
Verify the applicantís credit and do a background check.
Consistent financial stability is key to finding the proper tenant, so checking out their credit is a great idea. To begin, youíll want to verify their income by asking for pay stubs and contacting their current employer. As for their credit, youíll need to check for a number of things, like whether or not they regularly pay their bills on time or if theyíve ever been evicted. You should †factor in any debt this applicant has, as well. If their credit card or loan payments take up the majority of their monthly paycheck, they might be spent before their rent payment comes out.
To run a credit check, youíll need the tenantís full name, addresses for the past two years, their date of birth, current employer, current landlord, and social security number. Before running a credit check, you should check out the guidelines set forth by the Fair Credit Reporting Act, youíll also need written permission from the prospective tenant to do so. If youíre interested in digging deeper (learning about the tenantís criminal background, traffic violations, and educational history), there are a variety of free tenant screening websites online that offer in-depth reviews on the applicantís history.
Go with your gut.
Even if a tenant seems to check most of your boxes, sometimes itís safer to just trust your gut. You can screen and ask as many question as you want, but always be sure to tune into your intuition. If you canít trust the person youíre renting to, it does not bode well for your future relationship with this person. If you want a return on your investment, youíll need to find a honest, stable, and dependable tenant.