Today we’re talking about how to attract and retain quality tenants for your rental properties
Why should you care about this you may ask? Dealing with tenants is one of the most cited reasons for people not wanting to go into real estate investing. So if you’re already in the landlording business, this info I’m about to share should help you out!
Watch our video on the Risks of Investing in Real Estate. It will help as a refresher. This article to dispel and minimize some of those risks as well.
CHOOSE FROM ABUNDANCE
Like a lot of things in life, choosing from abundance is a great position to be in. In real estate investing, we want to bring in a lot of potential tenants, or “leads”, and then take our pick from the group. If you only have a few applicants, the risk of choosing a bad tenant increases.
In order to attract a lot of tenants, you’ll want to use lots of advertising. We’re talking facebook, craigslist, apartments.com, and more. Most of these platforms are free too which is great! Make sure before listing your property for rent, it is modern and move-in ready. High quality tenants do not want appliances from the 1970s. Nor do they want to see a dirty apartment when they go to look at it.
For fewer showings and less work for you, make sure to take high quality pictures of the unit and maybe even do a 3D scan. Also include as much information about your property as possible. The more info you put on the listing, the less time you’ll find yourself on the phone answering questions. It’s better for everybody.
Next, once you’ve attracted a large number of potential tenants, make the qualifications for renting from you very clear. If you don’t set strict expectations up front, tenants take possession of the property and suddenly it can get very messy, especially in overly tenant friendly states.
A few qualifications for renting that you may want to use are:
- 3X the monthly rent from documentable sources. No couch flippers!
- Good credit score, usually 700 or above
- No prior evictions
- No prior felonies
- Good references from previous landlords
- Pay all the utilities
- Renters insurance
- Rules for pets and pet rent fees
QUALITY CONTROL / VETTING YOUR TENANTS
Next, you’ll not only want to collect all the potential tenant’s information to meet the rental qualifications, but you will also want to VERIFY it.
- To verify their income, you could call their place of employment.
- Verify their credit and criminal history by using tools such as Transunion and Checkr
- To verify their prior eviction history and how they treated their last rental, call previous landlords AND make sure it’s not just a friend impersonating their previous landlord. To do this you can ask how long the landlord has owned the property that your applicant used to rent and cross reference that with the local property information system to see if it is true.
To ensure your tenants stay within the parameters of your rental agreement, make sure to be strict with your late fees policy and eviction notices. If a tenant notices that you’re being relaxed with late fees, then there will be no incentive for him/her to pay on time.
FINAL HELPFUL TIPS
- Make sure you aren’t discriminating against tenants for anything that is protected by law such as race, skin color, or religion. You can definitely discriminate on credit score and ability to pay you rent, but make sure to review the Fair Housing Act to make sure you are not breaking the law as a landlord.
- Don’t tell the tenant that you are the owner, just tell them that you are the property manager or that you are one of a few different owners. This will ensure you are not always being bugged by the tenant for property improvements and other requests.
- It is better to underprice a rental and have a great tenant, than to get top dollar for your rental and find that the tenant is not paying or has destroyed the place after they move in. There is a cost to having to fix things and for tenants that need to be evicted or chased for rent. Landlording can be a peaceful endeavour if you attract and retain high quality tenants.
THANKS FOR STOPPING BY
We really appreciate your time for reading our blog. Ensuring you have quality tenants not only saves you the headache, but also decreases your vacancies. Quality tenants are vital for a successful turnkey investment. Hoping these tips will help you become a more well-versed real estate investor. As always, check out our website for an inventory list, newsletter sign-up, and more. If you would like to schedule a free consultation call, please reach out to us!