Are you a new landlord who isn’t sure how to select a “good” tenant? It’s not rocket science, but there is no set-in-stone formula that works for every prospective tenant and every property, every time. Here are a few tips for newbies out there:
- Don’t wait until the perfect tenant comes to you; seek him out. Take an honest look at your rental property and surrounding area and decide what the ideal tenant looks like. Is this a three-bedroom house in a quaint neighborhood? Is it a one-bedroom flat in an up-and-coming section of the city? Think about the demographic who will most likely find your place appealing, and advertise where they are. The community bulletin board in the artsy coffee shop just down the block from your flat is probably the perfect place to hang a “For Rent” sign.
- Credit, credit, credit. Running a credit report on a prospective tenant will tell you a lot more than how much debt they have. You’re not looking at the score, or the debt, as much as you’re looking for the overall history, to get a sense of whether the person is fiscally responsible. Car repossessions, credit card charge-offs, and previous evictions will show up on a credit check, so pay attention.
- Double-check the dollars. Employment verification is key. Anyone can pluck a figure out of the air and tell you it’s their take-home pay. Verify the prospective tenant’s employment status, not just with a phone call but by requesting the most recent pay stub. A good rule of thumb is to decide the rent can’t be more than 30 or 35 percent of someone’s income. The last thing you want is a tenant who cares for the place but can’t pay the bills.
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