Renters and landlords want to, need to, have to find one another. But as with any relationship, the potential exists for it to be good, fair, or horrible.
So as a residential landlord – maybe a first-time one – how do you maximize your chances of finding good tenants?
Of course, you have to follow the Fair Housing Laws. Of course, you have to make the availability of your properties known. I’m not going to tell you what you already know and what 50 other websites will tell you.
Most of those websites presuppose that your rental properties consist of high-end units for which you can hold out for “ideal” tenants, with high-paying jobs they have held for years and nary a blemish on their credit or legal histories.
Well, that would be nice. But not every unit is like that, and probably most renters are not quite like that, either. Outside big cities, the “ideal tenant” is probably already renting a property.
You may be a novice landlord, like the one I knew who started out with two very modest four-plexes in a small city. He knew he wasn’t going to be renting to doctors, and he had some setbacks. But he kept at it, made a success of those buildings, and grew his business.
You HAVE to adjust your expectations to the actual units you have for rent in their actual locations. That does not mean you can’t get good tenants – only that you may not be able to get “perfection on paper.”
By all means, collect all relevant information from prospective tenants on their application forms. Vet them through personal interviews, and run background checks on their credit histories, criminal convictions, evictions, and employment and earnings status (a lot of which can be gathered through services such as TransUnion’s Smart Move, but you may want to call the employers yourself).
Then assess all of that information, including your gut feelings on meeting with the prospective tenants. Naturally, you have to use the information even-handedly – you can’t use one set of credit standards for people you like, and another for people you don’t!
But you can be flexible, again always depending on the units you are offering. For example, in 2015, many prospective renters will have some dings on their credit history or a lower credit score than you would want to see. Many may be working as freelancers or in the “gig economy” where their income varies somewhat from month to month. Some may have had brushes with the law. Some will occasionally be a few days late with their rent payments, or require understanding in other ways. It’s reality.
If there were enough “perfect” tenants to go around, you wouldn’t be reading this article.
If you got a “good read” on prospective tenants, but there are some questionable marks in their histories, why not ask them some follow-up questions to put your mind at ease? People can respond very positively when you meet them halfway.
The key to having a good landlord/tenant relationship down the road is to start it well, with honesty and empathy. From both sides.
Collecting all the information you need to make a decision is essential – but looking in a person’s eyes can count for as much.
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