If you own a property and are thinking of renting it out, finding good tenants who will take care of your home can be a bit challenging, but it’s essential that you approach tenant selection in a businesslike manner to protect your investment and to save you money and frustration!
Here are a few tips for finding the right renter for your property:
* Understand the Laws
Regardless of where you live, there are federal and state laws that cover landlords and tenants. The Fair Housing Act specifically outlines what constitutes illegal discrimination against qualified tenants. For example, you may not disqualify an applicant based on race, religion, national origin, gender, age or familial status. These rules are in place to prevent discrimination against persons with disabilities.
* Prepare your Property
No one likes to see someone else’s dirt! Even before you start marketing the property, remove clutter, take care of noticeable repairs, and deep clean your home! This includes windows (inside and out), baseboards, ceiling fans, professional carpet cleaning, appliances (inside and out), clean up landscaping including trimming back trees.
* Know Where to Advertise
Even though we recommend starting online, avoid free websites like craigslist.com. Instead, landlords may pay a fee of $50-100 per listing to advertise on rentals.com or rentalhomesplus.com.
Check with your home owner’s association to see if they allow signs in the yard; contact human resource directors at local businesses; use social media sites like Facebook and Twitter to let your friends know about your property. Include a photo of the house and list basic details such as location, size, number of bedrooms/bathrooms, garage size, rent amount and special features like a swimming pool, fireplace, etc.
* Use a Rental Application
Fair housing requires that you screen every applicant the same, so no matter where you find them, even if they are referred by family and friends, use a rental application that requests the applicants’ names; social security numbers; previous addresses; driver’s license numbers; income sources and amounts; occupant’s names/ages; number of pets/breeds; employer contacts & job title; references (not family).
* Do Background Checks
Charge an application fee of $25-50 to cover the cost of a background check. You should also provide the prospective tenant a rental policy sheet that clearly spells out the terms and conditions of the lease, such as pets, cosigners and renters insurance requirements. Do your best to verify the tenants’ income, and get a reference from their previous landlord.
* Avoid Interviews
Many landlords feel it necessary to interview the tenant as part of their screening process, but it’s not advisable. Requiring an interview could open you up to a Fair Housing violation. Also, how a person dresses or acts in person will not tell you how they could perform in a lease agreement. Remember the old saying, you can’t judge a book by it’s cover!
* Require Renters Insurance
When a property becomes an investment property, the home owner should contact their home owner’s insurance to let them know. The policy should be revised to cover the premises only and not the belongings. The tenant should be required to show proof of renter’s insurance, which will cover the cost of the tenants’ belongings as well as damage they could case to your house. Ask your insurance agent how much coverage should be required. The tenant may purchase renter’s insurance through many avenues, and the cost to the tenant could be as little as $10-15/mo.
* Require Certified Funds
To avoid potential problems with personal checks, require the deposit and first months’ rent in the form of a cashier’s check. If you opt to accept a personal check, don’t stop marketing the house and don’t deliver keys to the tenant until the check clears and a lease agreement is signed.
* Use a Lease Agreement
A strong written lease agreement will set the terms and conditions for tenants living in your property. It should include facts like who will live there, when rent is due, penalties for late rent, and spells out who is responsible for utilities, landscaping, etc. A good lease will also indicate the policies and basis for eviction, should the need arise.
* Be Patient
Even though you might be anxious to get your mortgage covered by a tenant, it’s okay to be a bit picky. Have high standards. Don’t feel like you should settle out of desperation. If you skip the important screening steps, you could end up with a lower quality tenant who might cost you in the long run.
Of course, Ravenswood Realty can handle all of this for you! Did you know that we offer full-service Property Management? Send us a message if you want more information! We can help ease the difficult process of marketing and screening your tenant!