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We’re hell bent on helping you find good tenants so you can protect your investment as a landlord, and also ensure your rental unit doesn’t sit empty for an extended period of time, reducing your profit potential.
While it may be tempting to rent the property quickly without consideration for tenant efficiency, doing so may result in expensive and time-consuming problems down the road. For example, if a tenant fails to pay rent, you will be forced to evict them and begin the process all over again.
If you choose the wrong tenant you might regret it! A judge would normally issue a possession order under section 8/section 21 within 6-8 weeks. Tenants may disregard a court-issued possession order, which is typically for 14 days, and tenants are often ordered to stay put by the council, which allows the landlord to seek eviction.
It can be stressful to learn how to find good tenants, particularly for landlords who have little experience or are new to renting out their property. Property owners raised strong concerns about taking on new tenants in a 2014 SmartMove user survey, with the top concern being payment issues.
Fortunately, there are ways to stop dealing with a risky tenant before you list your rental property on the market. We’d like to give you some pointers on how to locate a successful tenant early in the rental process. The following are some of the most important things to keep in mind when looking for a good tenant for your rental property.
What Is The Definition of a Good Tenant?
You should prioritise a good tenant based on objective evidence rather than individual views when selecting a tenant. When learning how to select good tenants, search for the following characteristics in potential tenants:
- Healthy track record of on-time payments
- Consistent earnings
- a good credit score
- Possibility of using an initial security deposit to cover any property damage
- Excellent references from previous landlords
- Neighbours should be handled with courtesy and respect.
- There is no history of eviction.
- There is no history of lewd or dangerous conduct on their criminal record.
With the above requirements in mind, here are five steps a landlord can take to find a suitable tenant for a vacant house.
Plan Ahead And Conduct Better Analysis
First and foremost, you must conduct an analysis. Since many jurisdictions control advertising and the tenant selection process, it’s crucial to know the local housing and tenancy laws that could apply to you. The Ministry of Housing, Communities and Local Government, as well as your local council, will have these on their websites. Another useful resource to consult would be a legal expert within the property sector.
Making A Property Desirable Is The First Step In Attracting Good Tenants
You will have an easier time attracting a more eligible tenant if the property is in good shape. Keeping the rental property in good repair will also help to create guidelines about how a tenant can leave the property after the tenancy ends. Furthermore, keeping your property in good condition will signal to the occupant that they should respect the property as well.
However, you should take into account the local income level in the area where your rental property is located. You may have trouble finding the right tenant if you over-improve your investment property in the hopes of charging a higher rent.
Make sure your rental property follows the fair market rate for the area and what it has to offer to prevent long-term vacancy. In the end, maintaining a neat curbside appearance, promptly attending to maintenance problems, and removing outdated cosmetics and fixtures may be just as beneficial as making larger changes.
Cross-check legislation with applicable local and national housing laws to ensure that you are in compliance.
Do what you can to change the quality of your property without breaking the bank, which may involve large-scale renovations or small changes like planting flowers, painting the interior, and cleaning the windows.
Calculate a fair market rent to optimise your profit potential while still attracting eligible applicants.
You’re ready to launch ads now that you’ve polished up the property and performed fair market rent analysis. It’s best to stop the costly flyers these days and stick to online choices. Because of its ability to reach a large number of potential tenants at a low rate and the success of online rental housing sites among renters, online advertising has become the industry norm. There are several websites where you can list your rental property, and some of them will even submit your ad to other sites for additional exposure.
Sites like OpenRent offer a free way to advertise your rental; just make sure your ad is current and appealing, or it will get lost in the sea of other property listings.
You could also make a virtual video tour that you can upload into the body of your advertisement. Be sure you illustrate both the positive and negative aspects of the property, so you don’t waste your time or the time of potential customers by showing them a property that isn’t appropriate for their needs — for example, no dedicated parking area, no in-unit washer and dryer, or maybe you don’t allow pets. The more transparent you are with prospective tenants, the larger the pool of interested applicants you can get.
Asking your colleagues, relatives, and former tenants if they have friends looking to rent is older, but a tried and tested method of finding trustworthy tenants. You might also provide a finder’s fee to sweeten the deal and make them more likely to assist you in finding a replacement or additional tenants. You may want to keep an active waiting list for your assets as well. You won’t be tempted to consider a less-than-stellar candidate only because the property is empty, and you need to fill it quickly.
- Keep your listing up to date when advertising it online.
- Make a virtual tour to show off your home and its features.
- Ask your family and friends for good references.
Be Clear About Your Expectations
A well-placed ad with a compelling description, clear images, and video could evoke a wide range of responses. And it’s likely that many of those willing tenants would fall short of your requirements. You can arrange your renter inquiries so that you can quickly find those who are the most eligible. It’s a good idea to state your preferences upfront and in the rental listing to reduce the number of unqualified inquiries.
Tenant Preferences May Include The Following
- The occupant will stay in the rental for a set amount of time.
- The occupant would not be permitted to smoke in the home.
- During the duration of the lease agreement, the occupant is not allowed to have pets.
- The first time you connect with an applicant, it’s normally by email or phone, and it’s your chance to learn a little bit about them, such as:
- Names of those who will be renting the space
- Personal information for all occupants
- The reason for the relocation
- Date of Occupation
- If you have any pets, how many do you have?
- Smoker status
Early in the tenant search process, learning basic details about your candidate will help you distinguish those who aren’t a good match from those who are. This is also an opportunity for them to ask questions about your rental property in order to decide whether it suits their needs, which is just as important.
You’ll be ready to have them fill out an application and begin the tenant screening process once you’ve identified a shortlist of potential applicants based on your initial evaluations.
Include reasonable tenant requirements in the property listing.
Gather information about the applicant and establish standards from the start.
Using predetermined requirements to narrow down the list of possible tenants.
Conduct A Thorough Rental Background Check That Includes Credit, Criminal, And Eviction Records
One of the most critical steps in learning how to select a successful tenant is to perform a comprehensive tenant screening. While it may be tempting to do a fast Google search or a social media search to learn more about an applicant’s actions, this is unlikely to provide you with the details you need to make an informed tenant decision. Checking their credit, criminal, and eviction records will provide you with a more complete picture of who they are. You can also get a better understanding of their ability to pay rent on time by using SmartMove’s Income Insights study, which helps decide whether additional income verification is required. In both of these reports, the landlord is accumulating critical details about the tenant’s future risks.
TransUnion SmartMove provides the following detailed reports to help you pick great tenants with more confidence:
ResidentScore provides a complete credit report.
Criminal history and background checks
Information on Earnings
History of evictions
A landlord reference search is a good idea in addition to reading tenant screening records. A simple call to a previous landlord will help validate details on the reports and ask about items the reports don’t reveal, such as:
- Did the occupant treat you and your neighbours with respect?
- Have you received any concerns about this tenant’s noise?
- Is your property in good shape after the occupant has left?
- Examine a tenant’s credit report to assess the applicant’s creditworthiness.
- With Income Insights, you can see if the applicant’s self-reported income needs to be checked further.
- Conduct a comprehensive criminal background search (DBS CHECK)
- An eviction report may be used to look at a tenant’s rental history.
OpenRent sends an applicant’s personal identifying details to a national consumer reporting agency. For you, the landlord, this means less paperwork and more security for the tenant. Furthermore, the landlord will use OpenRent to confirm the applicant’s identity, ensuring that the reports you obtain are accurate.
Landlords can potentially avoid a costly eviction by conducting a rigorous rental screening search on a tenant. Although some landlords are happy with merely reviewing a credit report for tenant screening, a more detailed tenant screening check will help landlords better understand the risks associated with a potential tenant. This entails not only looking at an applicant’s credit sheet but also looking at his or her eviction background, Income Insights, and criminal history.
Non-payment of rent is the most common cause of annoyance for landlords. Although a credit report is a good indicator of a potential renter’s financial background, it’s also crucial to confirm jobs and income. The landlord must have confidence in the prospective tenant’s ability to pay the rent. To that end, by evaluating the applicant’s credit behaviour and other variables, an Income Insights report will decide whether the prospective renter’s self-reported income requires further verification. This can save time and effort for the landlord by removing the need to manually check revenue, as well as reduce risk. If the report suggests that the landlord receive a payslip from the renter and contact their place of business or employer to verify their employment status before making a leasing decision, the landlord or estate agent can do this. It’s important to remember that the industry norm for renter income is three times income to rent.
Remember that choosing a new tenant is a business decision, and you can keep your feelings out of it. Consider the data you get from screening reports as a convenient way to do this. You’ll be less likely to make an emotional decision that you’ll later regret if you remain impartial and apply the same requirements to all applicants.
Maintain Mutual Respect To Retaining Good Tenants
Once you’ve found a successful tenant, keeping a mutually respectful relationship will help you get the most out of your contract. You expect maintenance and upgrades to continue just as you expect the tenants to pay their rent on time and keep the property in good shape. A lease agreement that sets out all of your policies (number of people living in the rental, payment due date, late fees, pets, smoking rules, renter’s insurance requirements, and so on) will help you avoid misunderstanding and miscommunication later on.
In the lease agreement, list any and all conditions that pertain to the rental agreement.
Conduct a comprehensive check, as well as eviction and income details.
Maintain the property and follow up on maintenance requests to satisfy the landlord’s obligations.
Finally, one of the most important ways to secure your investment property and find successful tenants is to conduct tenant screening. Landlords may find dependable and productive tenants for occupying their rental property using objective tenant screening information and a transparent method. This helps you to keep your rental property occupied and receive a consistent income.
Landlords with access to reports and act on them wisely will surely end up with excellent tenants allowing for a more informed leasing decision quickly.