A residential property is one of the most valuable assets you can own. Many people buy properties to make money through capital appreciation, while others lease them for rental income. Purchasing a rental property can be a highly lucrative revenue stream, but just how lucrative depends on the quality of your tenants. If your tenants pay all their bills on time and treat your property with respect, you will have no problems at all. But every landlord has experienced problem customers who refuse to pay their rent, damage the property, get complaints from neighbors, and in the worst cases, take unjust legal action against you.
Evicting such troublesome tenants can be a long and painful process, particularly if they refuse to go quietly. The best course of action is to implement a strict screening process from the start to ensure you find the most respectable tenants and weed out any potential troublemakers. Here are some tips to help you find the perfect tenants for your rental property.
Ask for recommendations
You will usually find the highest volume of applicants come from online listings, but the safest way of finding a respectable tenant is to ask your family and friends. A prospective renter who comes with a recommendation from someone you trust is much more likely to be well-behaved and respectful of the property than a complete stranger. Chat to people at work, post on your social media profiles, and call your loved ones to see if they know anyone looking for a new place to live.
Do background checks
It is usually standard practice to conduct a background check on a prospective tenant, but not all landlords do this sufficiently. If a tenant is not properly vetted, not only may they cause problems, but your negligence could result in your landlord insurance becoming invalid. Financial and identity checks can be easily applied for online. They will tell you whether a tenant is reliable and trustworthy enough to keep on top of rental payments, as well as flagging up anyone with a criminal record. Always ask for references from an employer or previous landlord to get a better sense of their character.
Conduct an interview
You may not get to spend a lot of time with someone before they move into your property, so it is imperative that you ask them the right questions and try to get a sense of who they are. Usually, a short chat is enough to get a feel for someone. Trust your instincts. Even if a prospective tenant looks great on paper, if you don’t feel good about them, don’t be afraid to accept another tenant instead.
Although it is impossible to know for sure whether a tenant will cause trouble, following these steps carefully will minimize the risk. Once they have moved in, you should check in with them on how they are getting on with the property. For peace of mind, consider installing a smart home sensor such as Minut, which can alert you if tenants throw noisy parties or leave the heating on. Always have a legal professional check over your tenant contracts to ensure it will be easy to evict a problem tenant if needed.