Best Way to Find Tenants for Rental Properties
If you just got your hands on a rental property, congratulations-you’ve just made a potentially profitable investment! As you begin down the road to becoming a landlord, you must know how to fill your vacant rental property quickly with a suitable tenant. The trick is not to let any bad apples slip through the screening process, or you could end up with significant financial losses, property damage, or legal liabilities.
Feeling overwhelmed? Just follow this guide on the best way to find tenants for rental properties.
Price Your Rental Fairly
The amount you charge for rent directly affects the profitability of your real estate investment. When figuring out a fair price to charge, consider these factors:
- Rent needs to cover your operating expenses, including mortgage payments, insurance, property taxes, utilities if applicable, repairs, maintenance, etc.
- The rate must be competitive with similar rentals in the area to attract applicants.
Advertise Your Property
To get the word out about your vacant rental property, try these popular advertising routes:
- Rental websites
- Social media
- Word of mouth
- “For rent” signs in the window or posted in the yard
Wherever you decide to advertise, make sure the ad is a concise, accurate description of the rental unit. Highlight positive features such as central air conditioning, stainless steel kitchen appliances, or a fenced-in yard. Disclose the number of bedrooms and baths, any included furnishings, whether pets are allowed, and the available move in date. Also include the monthly rent amount and security deposit required.
Establish Criteria for Selecting Tenants
The Fair Housing Act prohibits discriminating prospective tenants based on color, race, gender, religion, national origin, family status, or disability. Therefore, any criteria you set should be for the purpose of helping you choose reliable tenants that will abide by the terms of the lease, pay rent on time, and not engage in illegal activities.
After you show interested prospects around your property, invite anyone who’s serious about moving in to fill out an application. Standard applications collect the following information:
- Current address and phone number
- Social Security number
- Income and employment situation
- Credit, bank, and debt information
- Previous rental history
- Personal and credit references
- Permission to conduct a credit and background check
With all the information you need and permission to dig deeper, it’s time to screen your tenants. Here’s what to do:
- Verify income by contacting the applicant’s employer. The total rent shouldn’t exceed one-third of the prospect’s gross monthly income.
- Conduct a credit history check to help determine the likelihood that an applicant will pay rent on time.
- Contact references to help you build a picture of the prospective tenant’s personal history and reliability.
- Contact former landlords and ask about payment history and the resident’s overall conduct.
- Interview serious prospects to discuss relevant concerns such as work schedule, smoking rules, occupancy limits, pets, and visitors.
- When you feel satisfied that you’ve found the right tenant, you can both sign the lease and talk about a move in date.