For landlords, selecting a bad tenant for your property can be a costly exercise. Leasing your property to the wrong person could result in damage to the home, unpaid rental payments and even legal action. But by taking the time to search for the right tenant from the outset, landlords can minimize these risks and avoid any additional costs.
From face-to-face interviews to checking a prospective renter’s credit history, we take a look at five simple tips for selecting the right tenant for your property.
If possible, meet the applicants
If you are managing the property yourself, rather than hiring a real estate agent, the rapport you have with the tenants will be crucial. If time permits, schedule face-to-face meetings with the applicants. If you live out of town, set up a phone call instead. Spending time on this crucial step could save you a lot of problems during the tenancy.
Be thorough with documentation
Require certain documents of all applicants and be thorough in verifying these. As well as a copy of their identity card or passport, proof of income should be provided. This should take the form of both a work contract and copies of their most recent pays lips. In order to ensure the tenant can afford to lease the property, the rent should not be more than about a third of their total monthly income. For extra security, home owners can also require references from previous landlords.
Check their credit history
Perhaps the most important component of the screening process is verifying the prospective tenant’s credit history. This will tell you whether they have any outstanding debt, as well as whether they have a history of paying their bills on time. Even if they can afford the rent based on their current salary, they may have accumulated debt and these repayments will need to be factored into their budget.
Look out for warning signs
When reviewing an application, look closely at the prospective tenant’s rental history. Have they moved around a lot, or do they tend to stay in a property more long term? Most landlords will be looking for a tenant who is stable and willing to stay for a longer period. A patchy rental history where the tenant has moved house frequently could be a sign that there have been issues between the person and their previous landlords.
Listen to your instincts
All the information and documentation the renter has provided checks out, and you are almost ready to select the new tenant. However, there is something holding you back from offering them the contract. Even though everything seems to be in order, you feel uncomfortable renting your property to this particular individual. Always listen to this gut feeling and trust your instincts before making a final decision.