How to Find the Best Tenants for Rental Properties
It is very important to have good tenants in your rental properties because they help ensure that you have the cash flow. Nothing will cause a bigger drain on your finances then tenants that are either destructive or do not pay the rent. You also don’t want to have a huge drain on your time. Having to chase the rent, or do nit picky repairs, can cost you have a lot of your time and money. This is the reason why careful tenant selection is imperative to your success.
The number one strategy to finding a great tenant is to create competition. Being able to choose from among several candidates will help ensure that you have the tenant that you want. If you find yourself in a situation where you have only one candidate then you are at a disadvantage.
There are several ways to help ensure that you have multiple candidates to choose from. These include:
1) Have a competitive rent for your rental property. If you have a competitive rent compared to others in the area, depending on market conditions, you should have several candidates to choose from. You want to create a situation where tenants are clambering over themselves to rent your home.
2) Ensure that your rental property is as good as or better than the competition. Don’t show a home in great need of repair, smells, or in general is not as appealing compared to other rental properties in your area. Updating fixtures and cabinets could be required, but often not needed. By ensuring that your rental properties as good as or better you’ll make sure that you do not turn off candidates that would want to rent from you. That being said, you also don’t want to overdo the renovations within the home. You don’t want to have a home that is nicer than the average neighborhood home because you’ll be wasting your money.
3) Create a sense of urgency and competition. You the feeling of urgency by making sure the other tenants are aware there are candidates who also want the rental home. I do this by scheduling specific times throughout the week when the rental properties are available for viewing. This is often two maybe three times throughout the week. I make sure that the times are different for each appointment. I then tell the candidates that they have a couple choices of appointment times to choose from instead of allowing them to pick a time that suits their needs. I may lose some candidates this way but what is much more important is having the sense of competition. I then tell the candidates that the appointment is for a certain time. I do not give them a window of time. I give the impression that if they’re not there the time that they will miss out. I then arrive for the appointment a couple minutes late. By the time I have arrived I have already accomplished the sense of urgency because the other candidates will be aware that they are not the only ones looking at the home. And everybody quickly realizes that they must act fast if they had any chance of renting the property.
4) Continue to the show the home until you have a signed lease (and don’t sign a lease without at least the damage deposit). By having candidates in the waiting you can help ensure that you have substantial pool of tenants to choose from. Nothing is absolutely committed until you have something in writing… so keep your options open.
How To rule out tenants that you do not want in your rental properties
It is easy to rule out candidates if you follow these basic steps.
First of all make sure on your application form you make it clear that if the application is not complete then they then may be automatically rejected.
Second never tell a candidate that they are rejected, but instead present them with challenges that we must overcome. For example if the employment history is questionable because they are self-employed then have them provide several months of documented proof of income. Let the tenants rule themselves out if it is a candidate you do not desire.
There you have it… the foundation to help ensure you find great tenants for your rental properties.
For more information check out Showing Rental Properties to Potential Tenants.
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