When you’re looking for tenants to rent your properties, it’s okay to enjoy the process of meeting the people who file in and ooh and aah over your granite countertops, the view from the kitchen window, or any of the other touches that set your property apart. You can be friendly and outgoing, but keep in mind that when you’re looking for new tenants, you’re not looking for friends. Your relationship with your tenants is an ongoing business relationship in which they’ll be contributing to your monthly cash flow. Your number one priority is finding someone who will reliably pay their rent on time and who will be respectful toward your property and the other tenants.
When seeking new tenants, my number one commandment is: Thou shalt conduct a background and credit check. Background and credit checks are extremely important when vetting potential tenants. Always, without exception, do a credit and background check on anyone who’s interested in living on your property. If they plan on moving in with roommates or other adult family members, be sure to do background and credit checks on them as well. Do not accept anyone that has a felony conviction. If your property is in a neighborhood with an HOA, most HOAs have a policy against renting to felons. The HOA could drag you into a dispute that you’re likely to lose, and you’ll wind up losing time and money in the process.
If you have a no pets policy, be sure to look into the laws in your area regarding service animals. A lot of states have provisions that allow tenants to have service animals, as long as they have the proper paperwork. When it comes to service animals, in the majority of cases you cannot charge them any kind of additional deposit or pet rent. Again, learn about the laws in your area to ensure that you don’t unwittingly walk into a legal issue by refusing to rent to someone with a service animal.
Understanding these initial key tips for screening applicants will help you find the best tenants possible. Taking care of these details, in the beginning, will ensure that you’ll have the right people moving into your building. It may seem like a hassle in the short term, but it will spare you some major headaches to do some due diligence at the outset. Once it makes financial sense to do so, I highly recommend hiring a solid management company for your properties to handle all of the screening for you.