One of the most important parts of owning residential real estate is finding the right tenants. You want to find tenants who are going to live in your building peacefully while paying the rent on time, every month. Even better if you find tenants who are going to stay for a long time (even years).
Though it might seem easy to find tenants, finding good ones can be a little more challenging. Here are some tips to find the right ones.
Don't just buy the first property that you see. If you wait until you find the right place, good tenants will come. They will also pay more for nicer apartments that are up-to-date and have good appliances. The same goes for the location. If you can find a place near a good school, you will be catering to young couples and small families (who are more likely to stick around).
Have all potential employees fill out an application. This allows you to go over it in private, as well as keep all relevant information in one place. You should ask them (at a minimum), their name, address, and social security number. You may also want to collect that information for any other adults who will be living there. Many landlords also want to know any children's names and ages who are going to be there (even if on just a part-time basis). Other common questions include current landlords and employers. If they have had multiple apartments and jobs, get that information as well. You can ask any other questions that you deem relevant for your apartment building.
If you can, charge an application fee. Though you will have to read your local laws to see if you can charge a fee, if you can, do so. People who really want to live in your apartment building will pay a small fee. If they are fighting it, would you really want them as renters?
It can help to have a list of criteria that must be met before you accept an application. Though each landlord is different, you need to choose tenants with good credit, a good job, and the ability to pay the rent. You should make sure that they make more than double (if not triple) what you are asking in rent. You may also want to make sure that they have never been evicted from a previous apartment.
When you have applications, don't just ask for references – check them! Not all landlords screen their tenants as closely as they should. Call and talk to potential tenants' references. You might learn more than you thought about them and whether or not they would be a good fit in your building.
Don't feel rushed. Too many landlords panic when their apartments are empty so they rush into filling it with the first tenant that asks. This is a big mistake. Instead, take several applications, call their references, check their credit, and then make a decision. You will be much happier knowing that you took your time and picked the correct person or family for your building.
Be polite and let potential tenants know that they are not being considered. You don't have to accept every potential tenant. In fact, you may end up saying no more than yes. However, instead of just not responding to their application, you should write them a letter telling them no and why. This allows them to fix the problem so that they are more successful next time!
Though it can be stressful to have empty apartments, if you go through the process the right way, you are more likely to find the perfect tenants – one who will stay for years and pay on time! For this reason, have them fill out an application, call around, and then make your decision. It is important that you make the right one, even if it takes a few days or a week!
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