If you’re like most landlords, you probably became one because you wanted to increase your passive income streams. However, no landlord can find success without good tenants. These are the people who pay your mortgage and make it possible for you to continue to earn money after your mortgage is paid off. Bad tenants put a monkey wrench in these plans. That being the case, it is imperative that you avoid bad tenants. Here’s a look at some of the ways you can attract better tenants.
Get to Know Them
Renting to someone you don’t know is risky. Initially, you don’t know if a potential renter is a gem or if they are someone who has a history of late payments, evictions, or even crimes. However, as a landlord, you aren’t without a means to find this information out. A background check extracts data from someone’s past so that you can learn more information about them. This should tell you a great deal about the person who wants to rent from you. Aside from this, you’ll want to ensure that this renter will be a good fit for your rental property. If you’re renting an apartment in a community you own, then you want to rent to someone who can get along with other tenants. If you’re renting a home, then you want someone in the space who can get along with the neighbors and possibly take care of the property.
Make Sure They Understand the Rules
If you want your tenants to follow the rules, then you need to educate them about what the rules are. To take care of this part of the rental process, many landlords will put the rules right in the contract. The tenant can’t sign the contract until they indicate, usually in writing, that the rules have been explained and are understood. This is the best way to ensure that the would-be tenant will respect the rules.
Income Verification and Credit Check
A background check doesn’t always include a credit check, nor does it verify the tenant’s income. As the landlord, you’ll have to do that. A credit check will show how responsible the person has been with his or her other payments. A call to an employer will verify the person’s income, how long he or she has worked there, and even what kind of employee this person has been.This information gives you a pretty good idea about what to expect from the person. More importantly, it also helps you determine if this person can make the payments required.
Owning a rental property or two allows you to earn long-term passive income. However, the success of your property-owning venture rests largely on the kind of tenants you have. Bad tenants make you lose money and cause you lots of headaches. Given the risk involved with property management, it’s best to adopt a position that you’ll do what you can to keep good tenants happy.
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