If you’re successfully renting out your properties, you likely enjoy a good amount of pleasant tenants. But on the flip side, you might have encountered some stinkers.
Paying rent late, complaining about every little thing, leaving the property a wreck… all risks that come with owning rental property.
But there are ways to increase the amount of great tenants and have fewer of the nightmare ones. The secret is in being able to spot the difference early on. You don’t need a crystal ball, either. Here’s how to do it.
In this article:
1. Have High Standards
Landlords should have clearly defined standards for who they are willing to rent to and, just as importantly, who they are not. Some examples should include:
- No records of felonies.
- No prior evictions.
- Documented income three times the monthly rent amount.
- Positive references from past property owners.
- A credit score of 600+.
Make sure these guidelines are clear by putting them on your marketing materials, website, and being clear about them upfront with any prospective renter. This way, you don’t waste your time screening someone who isn’t compliant with your standards, and they don’t waste time applying for no reason. Just make sure you aren’t breaking any discrimination laws.
2. Act Like a Sales Funnel
A business sales funnel involves bringing in tons of people to your business with the understanding that a few with purchase your product. As a rental property owner, you want to use this same method to attract a lot of tenants.
The more people you can get to call you about your property, the higher chance you’ll find someone who is an ideal tenant. It allows you to be more picky. To get started, you’ll need to use an advertising platform like Zillow or Craigslist, Facebook, or even a sign in your property’s yard. Even better, do all of these.
3. Train Your New Tenants
Besides doing your thorough screening and background checks, you also have to let your tenants know how to act—because most want to be good tenants but might not know what’s included in the role.
Have well-established rules and make them known, then let tenants know the consequences of breaking the rules. Make sure they have all of the information needed about paying rent, when it’s due, and what happens if they don’t pay on time. Remain firm on the late fee or you’ll find yourself becoming more and more lax on the rule.
If you follow these three guidelines, your chances of finding great tenants will increase, which means less headaches for you. And don’t forget to utilize the knowledge of your property management company for more tips.