How To Find A Good Tenant

how to find a good tenant

Investing is real estate in the form of rental properties can be extremely lucrative, and an excellent asset that generates income. When you talk to people about rental properties the response normally falls into one of two groups. They either love it, and are swimming around in large pools filled with coins like Scrooge McDuck, whenever they have spare time, or they hate it and have tales terrible drawn out evictions, and thousands of dollars in damages. For some reason, this is the life associated with being a landlord, which is true to an extent, but can usually be prevented if you can find a good tenant. Here are a few tips to put the odds of building wealth with real estate in your favor. If you’ve ever had to find a tenant for the first time, you might ask the following questions:

  • What’s the best way to find a good tenant?
  • How do I screen a tenant?
  • What are the characteristics of a good tenant?

When you are a landlord, you need to rent to good people.  Screening tenants for your rental property will be the key to your success. – No Nonsense Landlord

The Number 1 rule to find a good tenant

Do NOT rent to any family, friend, or anyone you have any type of relationship. This is should go without saying, and is ranked very high on the 15 Landlord commandments, if you want to find a good tenant, and goes without saying but you wouldn’t believe how many people do this. No matter how nice this person is it wont generally work well. Your tenant landlord relationship needs to be professional. This means do not make friends with your tenants. One of my tenants used to always invite me out for drinks, but I always made sure to politely and respectfully decline.

Tenant Screening.

Screen your tenants. No really really screen your tenants. Seems like common sense for anyone hoping to find a good tenant, but remember those angry investors, this is the step that was either skipped or botched, that cause them to feel this way.  The first step to find a good tenant is the pre screen. This is done when you first advertise your property. Make sure you clean before taking pictures, because clean rentals help to attract clean tenants. Post your ad, with a detailed description of the property.

Next, you will want to add the things that will be required, I always choose the following, no felony convictions within the last 5 years, no sexual crimes arrest, must have verifiable rental history of at least 3 years, and must earn 3 times the rent, and no evictions ever. Those questions for potential tenants, are my first defense to help weed out the rift raft. I find that it filters out the majority of dead beat tenants. Last I include my application fee, this is generally $50, and is used to cover the background check, this is also put in the ad, for two reasons, so they know that I will be verifying the above questions, and because no one wants to waste $50 if they know they won’t pass. As I get potential responses, I call them back give them the address, and tell them do a drive by to see if they like the area. If they are interested I meet with them, and show them the inside. If the prospective tenant wishes to proceed. I have them fill out my application, and collect the application fee.

Now its time for the background check. Back in the day, this was tricky, but these days there are a number of tenant screening services such as Next you will want to add the things that will be required, I always choose the following, no felony convictions within the last 5 years, no sexual crimes arrest, must have verifiable rental history of atleast 3 years, and must earn 3 times the rent, and no evictions ever. Those questions for potential tenants, are my first defense to help weed out the rift raft. I find that it filters out the majority of dead beat tenants.

Last I include my application fee, this is generally $50, and is used to cover the background check, this is also put in the ad, for two reasons, so they know that I will be verifying the above questions, and because no one wants to waste $50 if they know they won’t pass. As I get potential responses, I call them back, give them the address, and tell them to do a drive by to see if they like the area. If they are interested I meet with them to show them the inside. If the prospective tenant wishes to proceed. I have them fill out my application, and collect the application fee. Now it’s time for the background check. Back in the day, this was tricky, but these days there are a number of tenant screening services such as

As I get potential responses, I call them back give them the address, and tell them do a drive by to see if they like the area. If they are interested I meet with them, and show them the inside. If the prospective tenant wishes to proceed. I have them fill out my application, and collect the application fee. Now it’s time for the background check. Back in the day, this was tricky, but these days there are a number of tenant screening services such as Next you will want to add the things that will be required, I always choose the following, no felony convictions within the last 5 years, no sexual crimes arrest, must have verifiable rental history of at least 3 years, and must earn 3 times the rent, and no evictions ever. Those questions for potential tenants, are my first defense to help weed out the rift raft. I find that it filters out the majority of dead beat tenants. Last I include my application fee, this is generally $50, and is used to cover the background check, this is also put in the ad, for two reasons, so they know that I will be verifying the above questions, and because no one wants to waste $50 if they know they won’t pass. As I get potential responses, I call them back, give them the address, and tell them to do a drive by to see if they like the area. If they are interested I meet with them to show them the inside. If the prospective tenant wishes to proceed. I have them fill out my application, and collect the application fee. Now it’s time for the background check. Back in the day, this was tricky, but these days there are a number of tenant screening services such as rentprep, that can do a full background and credit check for a reasonable price. These checks are quite comprehensive. Within 24 hours, any lies are exposed, as I have access to their former addresses, criminal history, eviction history, bankruptcy filings, credit score, and employment information. I then cross reference this with the application for discrepencies. My personal preferences are:

  • Credit Score must be atleast 600. I feel this score means you are fairly responsible, I may sometimes go as low as 570 if everything else is in order.
  • Criminal history must be extremely mild. I don’t allow any recent felonies within the last 7 years, no drug crimes(have you seen how the DEA kicks in drug dealers doors, looks very expensive), no sexual offenders, and pretty much anything that would indicate the tenants lifestyle could end them back behind bars, because jailed tenants can’t make rent. However if the prospective tenant got into a got arrested for public intoxication during Mardi Gras 5 years ago, I would not disqualify the tenant. Things happen, but this is a judgement call.
  • No evictions ever! I don’t care if it was 20 years ago. An eviction is one of the worst, and expensive things a landlord can go through. Evictions mean the tenant would not leave and had to be escorted out by law.
  • I make sure that they really work where they claim. Tenants will sometimes get creative here and give family members numbers, and instruct them to pretend to be employing them. I call jobs and speak with the supervisor, I verify employment and length of employment, this should match what was on the application. I require them to be on the job for at least 2 years.
  • I verify previous landlords, tenants also sometimes try to use family members for this, so use discretion. When the former landlords pick up, I confirm who I’m speaking with then ask them to verify the address of the the tenant, usually landlords will know this address right away and is a good indicator. Its always a good practice to speak to the landlord before the current. Sometimes the current landlord will be anxious to get rid of a bad tenant, and give a false praise. Once confirmed, I ask how the tenant was and how the home was treated. Landlords will tell you if they were trouble makers, or if they were late on rent.

If everything checks out, I can end my search to find a good tenant, and call the prospective renter and let them know that they passed the check and give them a move in date, and request one months rent plus a security deposit equal to one months rent. By pre filtering, and then screening and verifying potential tenants in this manner, I end up with end up with a responsible person who has the makings of a good tenant. I find that tenants with clean backgrounds, and pass these verifications are not flukes, they actually care about their reputations, thus are less likely to tarnish it. Both my tenants from house #1 and my tenants in the townhouse investment property that have been screened this way have rented my homes for 3 or more years at a time, and are extremely low maintenance. By thoroughly researching to find a good tenant from the beginning, I have less hassle and can truly consider this income stream passive income.

 

Are you a rookie landlord or a seasoned veteran landlord? Any tips I might have missed here? Let me know in the comments below!

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Comments

  1. […] pictures and began getting calls right away. I was very meticulous in the wording of my ad, knowing how to find good tenants, was essential to filter out the rift raft. I listed all my requirements, which were realistic, no […]

  2. […] rent for $650 and found a prospective tenant immediately. I made sure to take the right steps to find a good tenant.  I was happy I was now generating $650 per month without doing anything. I was building passive […]

  3. I’m glad you highlighted the rule about not renting to family and friends. You risk damaging the relationship and there will be awkward moments. I have an aunt who rented her unit to a close family friend. She told me she hasn’t raised the rent in 5 years because she feels bad asking!

    1. Thanks George! I think its best to apply this rule to all business, not just real estate. I have a simple general rule, don’t do any business with family unless your ok with the possibility of doing it for free. Rental properties should be treated as a business and not a charity!

  4. […] your tenant. Take a look at a persons track record with an online background check. Being able to find a good tenant is the foundation of a strong rental […]

  5. […] your tenant. Take a look at a persons track record with an online background check. Being able to find a good tenant is the foundation of a strong rental […]

  6. When it comes down to tenancies, housing and renters, it’s more than crucial and generally mandatory for both the home owner/ landlord and tenant to do their home work and gather background info about their future tenancy agreement. I’ve seen situations where landlords are put to their knee’s due to various local housing rights, councils and etc.

    JJ
    End of tenancy cleaning PRO

    1. I totally agree. I think on both ends its equally beneficial to research what you are getting into. From a renters perspective, this will be HOME for usually atleast a year.

  7. An excellent guide. Everything that landlords need to know was gathered in one article. I like that you explained the importance of credit reports and background checks when looking for trustworthy tenant . Not running tenants screening might lead to unexpected and unpleasant consequences. One point I would like to add regarding application fees. Some property rental platforms, for instance, Rentberry, don’t charge fees. They do tenant screening for free.

    1. Thanks, application fees are important. I generally charge $20-25 dollars above my screening check price.

  8. Thanks for the quote!! Great article and you blog is definitely one of the best!

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