Finding the Right Tenants
Whether you choose to manage your rental property or have a professional property management service, choosing the right tenant is a crucial element of any successful project. The rent from your properties as well as occupancy rate will make or break the financial success of your project. If you chose the wrong tenants, you could face problems such as late rent and property damage.
Here are the three critical steps for you on how to select a good tenant for your rental properties:
Gather the Applicant’s Information
The prospective tenant should be able to provide the following documentation with their application. These documents will allow you to verify their identity and income.
- Social Security card
- Driver’s license
- One full month of their paystubs
- Two years of tax return
- References from two former landlords
- Have minimum one month of rental payment for security deposit and a first month’s
Conduct a Thorough Review of the Tenant
Review the tenants’ application carefully and use credit company to run their credit and also a background check. Running a credit check will provide information that might not show up on their current information
Complete your Analysis of the Tenant
Analyze their credit, income, outstanding debts, any collections on their credit reports, any criminal records, etc. Then select the right tenant that meets your selection criteria’
- Their income is three times of the rental payment
- Monthly debt payment on their credit is not over half of their gross income
- Make sure to review any delinquent and collections on their credit report.
- Check to see if they have a criminal record. If so, asking for the supporting documents.
There is no way to guarantee your tenants will be the right tenants forever, people’s lives change. By doing your due diligence by following these three basic steps you increase the probability of having good long-term tenants.
Please leave your comment below whether you like to manage your rentals or hire a property manager.