Property Managers’ Guide to Attracting Reliable Renters

4/29/2024 (Permalink)

Attracting Reliable Renters

Finding reliable renters can be one of the most difficult aspects of owning an investment property. The truth is that finding good tenants can dramatically impact your experience as a landlord. It can also impact your ability to make your investment profitable. A quality tenant is someone you can rely on to:

1. Consistently pay the full rent on time every month.
2. Treat your property with respect.
3. Follow all rules for conduct on the property.
4. Honor your lease agreement.
5. Communicate maintenance problems with you.

The good news is that there are countless high-quality renters out there looking for a safe, comfortable place to call home. Knowing a few tips for finding and screening potential tenants for your rental listing can help keep everyone involved happy! Here are some tips for getting the right potential tenants.

Start With an Understanding of Rental Laws

As a landlord, one of your most important responsibilities is avoiding any form of discrimination in tenant selection. The Fair Housing Act prohibits all landlords from discriminating against tenants based on race, skin color, sex, nationality, religion, disability, or family status. Even the appearance of discrimination can be enough to land a landlord in hot water.

Set Firm Tenant Criteria

One of the biggest mistakes a landlord can make is to not create a profile for an ideal tenant. Without a benchmark, knowing how to measure each candidate can be hard. Here's a look at some basic criteria to consider:

1. Income Requirement: This will be specific to your renting property. Generally, landlords prefer tenants with monthly incomes two to three times the monthly rent. Landlords in high-cost-of-living areas may need to lower income criteria to account for higher rents.
2. Credit Score: Some landlords will look at a tenant's credit score to determine if they are a reliable fit. A credit score offers a window into a tenant's financial behaviors. Someone with a low credit score may have a history of failing to pay bills on time. Meanwhile, a high credit score showcases a tenant's reliability in paying bills.
3. Eviction History: Ideally, a tenant won't have a history of being evicted for conduct issues or nonpayment of rent.
4. Prior Felonies or Criminal Behavior: Can you refuse to rent an apartment or home to someone just because they have a felony or criminal background? This is a complicated aspect of landlord laws. In most states, denying housing to an individual strictly based on their criminal record can be seen as a form of discrimination. However, landlords can use their discretion when it comes to criminal behavior that could raise safety concerns. If you have any questions about housing laws when vetting potential renters, it's always wise to consult with a local attorney familiar with state and federal laws.
5. References: Consider asking for a reference from a previous landlord.

Finally, always list the security deposit on any advertisements or posts you use to attract tenants. The size of the security deposit is an important factor in screening tenants. If a tenant cannot come up with the required security deposit, this can indicate that the property is out of their financial reach. Situations where tenants stretch their budget to get into an apartment can be stressful for tenants and landlords.

Create a Clear Rental Application

Don't rely on verbal agreements when dealing with tenants! Always insist that filling out a rental application is the first step. Rental applications are important because they provide a way to collect essential personal information about prospective tenants. If you're interested in a property, neat and organized applications will allow you to reference applicant information when applicants contact you to follow up. A very basic rental application should have the following:

1. The full legal name of the applicant.
2. The full legal names of any co-applicants.
3. Contact information for the applicant.
4. Driver's license numbers.
5. Job title and location.
6. The applicant's Social Security number.
7. Current and previous addresses.
8. Income sources.
9. Monthly income.
10. Names and ages of any children who will be living in the rental.
11. Personal or professional references.

If your rental allows pets, provide a section where tenants can list all pets by type and breed. Many landlords choose to charge a nonrefundable application fee. In addition to covering the cost of conducting a background check, this fee ensures that only serious tenants apply. In fact, refusing to pay an application fee can be considered a very useful built-in screening tool!

Don't Skip the Background Check Just Because Someone Appears Reliable

While a lease application can provide first-hand information about a tenant, landlords should always verify application information using background checks. Always inform prospective tenants that you intend to conduct a background check once you have completed the application. Depending on which types of checks you conduct, background checks can reveal the following:

1. Credit score and history.
2. Criminal history.
3. Eviction history.

Most landlords consider a criminal background check the most important aspect of tenant screening. Keep in mind that background screening doesn't just protect your property. It can also protect neighbors and other tenants from harm. A serious criminal background check will scan millions of records to look for matches on state and federal registries.

Market Your Property Properly

The final tip for finding a great tenant is to offer a great property. While there's no doubt that you're eager to find reliable renters you can trust to pay on time every month, it's also important to remember that potential renters are just as eager to find well-maintained, safe properties they can call home for the duration of a lease. Showing off photos of a crisp, sparkling property maintained with care is a great way to attract high-quality renters with your listings!

The period between tenants is a great time to audit your rental property to look for any safety or aesthetic issues that might turn off tenants. Fresh paint, updated appliances, updated flooring, secure locks, and high-quality doors and windows can all give tenants confidence that they will move into a safe, properly updated space. One thing that can send savvy tenants walking in the other direction after touring a property is visible water damage. Unfortunately, landlords don't always have control over water damage. Anything from an irresponsible tenant who left a faucet running to a mechanical issue with the plumbing system can result in serious water damage. When left untreated, that damage can leave a property susceptible to rot and mold. Both landlords and tenants should know that calling a professional immediately for emergency water removal is crucial at the first sign of dripping or pooling water.

Final Thoughts on Finding Reliable Renters

When it comes to finding reliable renters, it truly takes two to tango. Yes, all landlords must conduct the necessary screening and background checks to weed out unreliable or potentially dangerous tenants. However, it's also essential to offer a property of the caliber that good tenants are looking for when they need a safe and attractive place to live. Do you need some help getting your property in shape to be listed? SERVPRO Arcadia offers fast remediation services for landlords in the aftermath of messes, mold, fire damage, and water damage.