How to Find a Good Tenant for Your Rental Property

How to Find a Good Tenant for Your Rental Property

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One of the ways that you can generate income is to rent out a property. However, there are a lot of challenges to being a landlord. You have a lot of responsibilities, and they can be made harder by a difficult tenant. If you want a good renter for your property, you need to take the time to set up specific procedures designed to help you identify the right renter, as well as protect yourself against future problems.

As you search for the right renter for your property, here are some things to keep in mind:

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Photo by Charleston’s TheDigitel.

Know the Law

First of all, you need to know what constitutes discrimination. While you have some leeway in asking for tenants that don’t smoke, or in disallowing pets, you can’t discriminate based on race, religion, gender, age, disability, or family status. It’s ok to reject someone due to criminal or credit background, though.

Before you start your search, make sure you understand the Fair Housing Act, as well as the laws applicable in your state and locality. Often, your local government will be able to provide extensive information pertaining to both the landlord and the tenant. For example, Virginia provides an extensive 43 page residential landlord and tenant handbook that is a must read for any landlord in the state.

You can also consult with an attorney if you have questions about the law.

Pay to Advertise

While it’s okay to advertise on free sites, such as Craigslist and Zillow, you have to be extra careful with your screening process. Many scammers troll free web sites, looking for rental listings that they can manipulate. Another concern is that you might not get the same caliber of respondents with the free options.

Consider paying the money to advertise in your local Classifieds, as well as listing on paid online rental sites. You are more likely to find higher quality tenants if you advertise in publications where they are more likely to look.

Create a Rental Application

One of the best ways to screen potential tenants is with a rental application. This application should provide you with the information you need to run a credit check and a background check. You can even ask for references so that you can talk to others who have worked with the tenant in the past. Don’t forget to include employment information, and check up on whether or not the potential tenant is currently employed.

You can search the web to find samples of rental application that you can adapt and use for your property. Just do a search for “rental application” and you’ll be presented with many viable options.

If you want to take it a step further, you can request an application fee as well. Check with your state to find out if you are allowed to charge a reasonable fee (around $25 or $30) for each application. You can see immediately who is more likely to be a serious applicant by who is willing to pay the application fee.

Don’t use an interview as part of the application process, though. In some cases, an interview can lead to rejected tenants suing you under the Fair Housing Act. Instead, stick to applications, references, and background/credit checks to help you make decisions about renters.

Run Background and Credit Checks

As part of the application process, you inform your potential tenant that you’ll be running a background and a credit check. These checks will help you weed out any problematic  tenant. For background check, you can use online services such as Intelius. And for credit check, you can use Experian Tenant Screening service.

Ask the Tenant to Get Renter’s Insurance

Renter’s insurance is one of those things that is under-appreciated. Many renters don’t realize that it can be a great protection to them, by providing a payout to help cover the cost of damaged items, as well as to help them cover damage done to your property.

Explain that you require tenants to carry renter’s insurance, and that you will need proof of coverage when the tenant moves in. Renter’s insurance isn’t very expensive; most renter’s can afford it. And, if the potential tenant is willing to purchase renter’s insurance, you know that he or she is probably serious — and likely responsible.

Create a Lease Agreement

Finally, in order to protect yourself and spell out the responsibilities of your renter, it’s a good idea to have a lease agreement. The right lease agreement can set the grounds for eviction if that becomes necessary. A responsible tenant will not hesitate to sign a lease agreement designed to set forth the terms of the rent in a way that can protect both parties.

Again, some local governments can provide you with a standard lease agreement. Likewise, an online search “{Your State} lease agreement” should provide you with many viable sample agreements to choose from.

Your lease agreement, along with other steps you take to screen rental applicants, can help reduce some of the pitfalls that can come with renting your property out to someone else.

3 thoughts on “How to Find a Good Tenant for Your Rental Property”

  1. We once owned a rental property and used a property manager to handle things. His tenant screening process included visiting the applicant where they live now. I thought that was pretty clever–can really show you how the applicant would live in your property!

  2. I really want to get a rental property for diversification, but the housing prices around here are so astronomical that there’s a huge barrier. 🙁 If I still lived in Texas, we’d have several duplexes by now.

  3. When I was a landlord I did all these things and one more. I would visit the perspective tenant’s current apartment to see how they live and take care of the place. I would use an excuse like I was just in the neighborhood or I wanted to just one more thing or I wanted to let them know they were approved. It tells you a lot about the tenant.

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