How to pick the perfect tenant for your investment property
After you’ve purchased an investment property and prepared your space for lease, the next major step is to find the ideal tenant. Your property manager will be able to assist you in positioning your property to attract the best possible applicants. Once you’ve gotten some great potential tenants through the door, there are a few key things to keep an eye out for to help you choose the perfect tenant. Continue reading for our top tips on what to look for when evaluating potential tenants.
Ask good questions
Whether you handle leasing yourself or have a property manager handle it for you, a few key questions will give you insight into your potential tenants:
- Why are you moving? This will allow you to determine whether a tenant is leaving their current property due to issues such as a disagreement with neighbors or being evicted. Quality tenants will usually have valid reasons for moving, such as a new baby, relocating closer to work, exploring a new suburb, or needing more space.
- What’s your employment situation? Work arrangements naturally have an impact on someone’s ability to pay rent. Casual employment may pose a greater financial risk, whereas permanent full-time or part-time employment may pose a lower risk. Requesting employment references can assist you in determining a potential tenant’s employment stability.
- Can you provide rental references? Contacting rental references, such as previous landlords and property managers, is one of the best ways to learn more about your potential tenant. If a referee is hesitant to answer directly or makes excuses, this can be a warning sign.
Verify the person’s rental history
Your property manager can assist you in verifying the rental history of a potential tenant. They can accomplish this by contacting the applicant’s rental references, verifying property ownership if the person is moving out, and checking to see if they are listed on any tenant default databases.
Check application accuracy and completeness
If a potential tenant has taken the time to provide as much information as possible to make evaluating their application as efficient and simple as possible, it can be a good indication that they will bring the same diligence to caring for your property. Check that everything on the form is completed and that all supporting documents were submitted together before evaluating an application. If you’re not sure about the applications you’ve received, ask your property manager for assistance and advice on who made a good impression at the open house.
Investing the time to find the ideal tenant will provide you with numerous advantages while your property is leased. It not only increases the likelihood that your rent will be paid on time and in full each month, but a good tenant will also take care of your property as if it were their own. Use the tips above to find quality tenants and have peace of mind that your property is being cared for.
Remember, this article does not constitute financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.
