Real estate owners and property managers in Niles are often faced with the daunting task of finding great tenants. One bad tenant can result in costly damages to the rental property, as well as an expensive and time-consuming eviction. Which is why it is important to find tenants with qualities that indicate they are responsible and low-risk. We have compiled a list of the six qualities of a great tenant which can be used as a reference to evaluate prospective tenants.
1. A Great Tenant Can Afford to Pay the Rent
A prospective tenant should be able to afford the rent without becoming overextended with other financial obligations. Tenants who have high car payments or high credit card debt could choose to delay paying rent in order to pay other bills. To lessen the risk of renting property to a high-risk applicant, property owners should ensure that the rent does not exceed 30 percent of the rental applicant’s annual income.
2. A Great Tenant Has a Stable Lifestyle
Property owners want to find tenants who are responsible and willing to rent long-term. Having stable, long-term tenants saves landlords time and money by not having to find and screen new tenants. But how does a property owner find stable tenants? By asking a few key questions: How long have you worked for your current company? How long did you work for your previous company? How often have you moved in the last three to five years? Applicants who are college-age or recent graduates are likely to make frequent job changes or relocations. However, an older applicant who changes jobs and moves frequently is likely to be unstable. Ideally, property owners should try to find tenants with patterns of long-term employment and long-term rental histories.
3. A Great Tenant Has a History of Financial Responsibility
A great way to gauge the financial responsibility of prospective tenant is to perform a credit check. A tenant with a good credit score usually has a history of paying bills on time, reasonable debt and the ability to properly manage money. A tenant with a low credit score may have a history of late payments, judgments for unpaid rent or damages, high debt, and loan or credit card charge-offs. Applicants with low credit scores are generally high-risk and likely to pay rent late or not pay rent at all. In addition to checking a potential tenant’s credit report, we recommend conducting a thorough background check. The background check should include employment verification, reference checks, and rental history verification.
4. A Great Tenant is Honest
A prospective tenant may seem like an honest person, but they could be deliberately withholding important information regarding their income, employment, and rental history. Thoroughly screening all prospective tenants is the only way to weed out dishonest applicants and possibly avoid trouble in the long run. A dishonest tenant who has dodged a thorough screening may later lie about mailing a rent check or lie about damages in his or her rental space. It is best to catch dishonest applicants before they end up costing the owner money.
It is important to verify every detail in the rental application. Make sure the name on the application matches the name on his or her driver’s license. Also, a quick phone call to the current employer can verify if the income listed on the application is correct. Then, call the current landlord to verify dates of residency and to get the landlord’s overall opinion of the tenant.
5. A Great Tenant is Considerate of Others
First impressions speak volumes. The first meeting with a prospective tenant can reveal whether or not they are considerate of others. A property owner should reflect on the following questions: Was the applicant late for the appointment? If so, did they call to inform the property owner that they would be late? Were they well-mannered and respectful during the meeting? A considerate tenant is likely to obey rental policies, take proper care of the rental space, be respectful to neighbors and pay rent on time. How a prospective tenant behaves at the first meeting is a good indicator of how they will behave as a tenant.
6. A Great Tenant Has Good References
Great tenants generally have good references, and a good way to gauge an applicant’s suitability for renting is by finding out about their conduct with previous landlords. Former landlords can provide information regarding the applicant’s payment history, adherence to rules, the condition of rental space after they vacated and the tenant’s demeanor. An applicant with good rental references is not necessarily guaranteed to be a great tenant, but it is highly probable that they will be.
Before using our six tips to find tenants, remember to abide by the Fair Housing Act which prohibits housing discrimination on the basis of race, sex, color, national origin, religion, disability and familial status. Be sure rental decisions are based on measurable factors such as a potential tenant’s credit score and income-to-rent ratio. Also, ensure that new tenants are fully informed about the property owner’s expectations for their tenancy. Thoroughly reviewing the rental agreement and policies with new tenants can help avoid misunderstandings and legal issues later. And as always, our reputable property management company in Niles is eager to help property owners find tenants of the highest caliber. Call us anytime!