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Monetizing Real Estate: 10 Tips to Aid You in Your Search for Good Tenants

Posted On Friday, 25 March 2022 19:23
Monetizing Real Estate: 10 Tips to Aid You in Your Search for Good Tenants

Building a rental property portfolio can be a path to achieving solid financial gains as you enjoy the dual benefits of a regular rental income and solid growth in the value of your real estate over a period of time.

However, those goals can only be achieved if you manage to secure the right sort of property and, most importantly, you find a renter who is going to pay every month and look after your investment while they live there.

Finding a good renter is absolutely critical to successfully monetizing real estate. Here are some key tips to help you find the right one for your property.

Know what’s expected from both of you

A good starting point would be to make sure that you understand d the main points of federal and state laws when it comes to what’s expected from landlords and tenants.

If you conform to all aspects of the law and intend to treat your tenant fairly, following the guidance outlined in the Fair Housing Act, for instance, this will allow you to tell your tenant what you want from them from a position of authority.

This helps build mutual respect and understanding between you that will usually improve the chances of your tenant fulfilling their obligations when renting your property.

A good way to improve the odds of getting the right tenant

One of the main questions you might have is where is the best place to find a good tenant?

Using a trusted and respected site that matches a landlord with a renter is a good way to go. You will be able to look at the profile of a person and get a good idea if they are a good fit for your property and requirements.

Advertising generally in a local grocery store or even in the local paper might find you a good tenant but it is also possible that someone who doesn’t have the right credentials or intentions could also chance their luck and apply via one of these options.

Present the property in the best possible light

It stands to reason that a responsible tenant will be looking for a home that is nicely presented and well maintained. 

If you clean your house and present it for rent in the best possible condition this will help you to find a tenant who will be happy to move into somewhere so nice. They will also be motivated to keep it that way.

Collect all of the right information

It is imperative that you get as much information as possible about a prospective tenant.

The best way to do that is to use an application form that asks all of the right questions. Ask for references, employers' details, and other key data such as driver's license number and social security number.

This allows you to check them out. It also means that if they are genuine they won’t mind providing this level of detail.

Make sure they get insurance

Having insurance is a key requirement both from the landlord’s and tenant’s perspective.

If you are satisfied that you have found the right tenant you need to request that they arrange renters insurance and provide you proof of this before you agree to let them move in.

It would also be a good idea that you take out landlord insurance so that you have good coverage in case something unexpected happens and you need to cover the cost of repairs.

Be wary of formal interviews

One of the issues surrounding the use of interviews to select a tenant is that it does leave you vulnerable to the prospect of being biased in your selection process.

This formal approach to finding the right tenant can often have limited value anyway. This is because someone can present themselves well in that scenario and hide what they are really like.

Far better to take a more informal approach and check out references thoroughly if you want to know what someone is really like. You will also avoid the prospect of being subjected to a Fair Housing lawsuit if someone thinks you have not treated them fairly after being interviewed.

Carry out external checks

You will be able to check with previous landlords and employers whether the information provided by the tenant checks out.

It is also advisable to do some proper background checks using an external reference agency.

You can either search their credit history to see if there are any surprises you should know about or you could use an agent who will do a more thorough background check on your behalf that includes verifying their employment income, for example.

Take your time

You might be in a hurry to rent the property and start collecting a rental income but it always pays to be diligent and patient before handing over the keys.

Don’t let the tenant take possession of the property until all of the agreements have been signed and the deposit check has cleared the bank.

Use a comprehensive agreement

It often pays to draw up a comprehensive rental agreement that covers all aspects of the contract that could be tested if things go wrong.

The agreement should cover a range of terms and conditions that include things like maintaining the property to a fair standard and stipulating who is allowed to love at the property. This prevents them from sub-letting, which is not something you want under any circumstances.

Set a high standard

It is far better to wait for the right tenant to come along rather than compromise just because you want to get the property rented out as soon as possible.

It might require a degree of patience before you find the sort of quality tenant you want. Your patience and diligence will often be rewarded and this is a better approach to take in the long run.

If you cover these key points when looking for a tenant it should allow you to collect your cash each month with a minimum of stress and hassle.

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