A bad tenant is bad news. The screening process can be quite complex, but it’s one of the most important steps in renting out a property. Finding the right tenant and therefore avoiding issues like delays in payment or damage to your property is definitely one of the biggest advantages of hiring a professional property manager. However, if you decide to locate your next renter yourself, whether through social connections or via classifieds, here are some things to keep an eye out for to make sure you get yourself a good one.
Bad or No Credit
As a landlord, your top priority is finding a tenant who will be able to pay your rent rates on time every month without any prodding. Your best chance of finding such a tenant is to run a credit check on your applicants. Nowadays, most credit scores will land somewhere between 300 and 850. Anything below 600 should raise a red flag. Your most trustworthy and financially responsible tenant candidates will likely be somewhere between 700 and 800.
No employment or unreliable employment
Your tenant should have adequate income to regularly pay the rent. Lack of proof of employment is obviously a red flag, as is seasonal employment that might not provide a consistent paycheck year-round. Look for a tenant that has held down the same job or career for at least 12 months. People who frequently change their jobs might not be ideal either because they could leave you without rent when they’re between jobs. An applicant who demonstrates consistency will be a more reliable tenant.
A potential tenant needs to be able to afford rent every week, not just at the start. Ideally, you’re looking for someone with an income 2.5 to 3 times the cost of the rent. This ensures that you won’t need to wait for your tenant to collect enough money for rent each month, as their salary should be enough.
Receiving an incomplete tenancy application is a big red flag. Incomplete information might mean that the person has something to hide, or they’re just not too detail oriented, or couldn’t be bothered. Either way, you should work to get extra clarification on the missing info.
No landlord references
Although not everyone is likely to have them (some people are escaping a sub-optimal living situation), references from a previous landlord are a great thing to have. If a reference however sounds too good to be true, it can be a potential tenant scam. Always follow up with previous landlords for the real story and to find out whether the references are genuine. If there aren’t any references, make sure to ask questions.
An eviction is the biggest renter misdemeanor there is. If a candidate has been evicted by a landlord in the past, this might appear on their credit check. Do reference checks and speak to your potential tenant’s former landlords.
Looking to move quickly
If somebody wants to move in straight away, it doesn’t always mean a red flag, but it may not be a good thing. While they might just be keen to move closer to their workplace, this could also mean that they’ve left a previous landlord in the lurch. Just be sure to find out and check the reason before you go ahead and sign them up.
Finding the right tenant can be an overwhelming process. This is why so many condo owners trust property management companies to handle the tenant selection and rent collection process to take a lot of stress off their shoulders and give them peace of mind.
At Hales, we strive to take care of the hard stuff like finding a trustworthy renter and keeping them happy so you can focus on the easy part — depositing the rent check (or, not even that, because we can send you a direct deposit). Get started now and get your first month of rental services free.