Starting your foray into landlording? There’s one thing you must know: as a landlord, the first tip to finding success is finding a good tenant.
As a landlord, the quality of your tenant makes a world of difference in your life. Renting to a good tenant makes landlording simple, straightforward, and as lax as possible. Renting to a bad tenant, on the other hand, can take over your life. You may have to enact evictions, court proceedings, and even criminal charges.
So, what separates the good tenants from the bad? We’re here to help you understand just that. Read on to learn 3 things that make a good tenant.
They’re Financially Responsible
The first thing to look for in a new tenant is financial responsibility. The primary responsibility of a tenant is paying the agreed upon amount and doing so on time. By confirming that a tenant is financially responsible, you’ll set yourself up for a positive landlord-tenant relationship.
In order to determine a tenant’s fiscal habits, the first question you must answer is whether they can afford the cost of rent. As a rule of thumb, landlords look for tenants whose monthly income is 3 to 4 times the cost of rent, though in cities with a high cost of living, that requirement typically drops down to 2 times the cost. Confirm that your tenant meets this requirement by verifying either several weeks of pay stubs or their prior year’s tax documents. If they don’t generate enough income themselves, require that they have a cosigner who does.
Next, it’s time to discern whether they have a history of paying on time. To do so, you must perform a tenant credit check. While credit scores are highly debated as a reflection of financial responsibility, they can be a good indication of a tenant’s likelihood of paying on time. First, take a look at their credit score to confirm that it’s in an acceptable range. Next, confirm that they have a history of paying on time over the past several years. Finally, look at their overall debt amount. Will their income cover both their debt and the cost of rent?
In the event that you come across a red flag in a tenant’s credit history, it’s important to have an open and honest conversation with them about it. Unfortunately, a financial mistake as a young adult can have dramatic effects on a person’s credit score for many years. Give your prospective tenant the opportunity to prove they’ve changed.
They Have Good Reviews
Another extremely important source of information for determining whether your prospective tenant would make a good tenant is their references. It’s a good idea to ask for both employment and current and prior landlord references from any rental applicant. Others’ experiences of your potential tenant can be extremely revealing.
When contacting these references, be sure to ask the following questions:
- Can you confirm your relationship with this person?
- Have you ever had any issues with them?
- Would you hire/rent to them again?
Be sure to pay close attention to their responses. A person with a history of behavioral issues at work or conflicts with their landlord will probably not make a good tenant.
They Give You Good Vibes
Okay, this one’s a little harder to define, but you know it when you feel it. When it comes to selecting a tenant, trust your gut instinct. If someone seems off, shady, or just gives you a weird feeling, maybe it’s not a good idea to rent to them. You may think that’s crazy, but there’s logic behind it.
Here’s the thing: the landlord-tenant relationship is more than just a handoff of a paycheck. You’ll need to interact with this person much more than you may think. You’ll need to communicate with them about maintenance issues, any problems with their payments, and other one-off questions you or they may have. If your property has many tenants, you also want to avoid a situation in which a new tenant may create conflict with an existing tenant. All in all, it’s important to trust your instincts.
Don’t feel intimidated by the prospect of finding a new tenant. By following this advice, you’ll be able to weed out the good from the bad and set yourself up for years of success.
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If you're a brand and want to work with us, please visit this page to get in touch.