How To Choose A Renter

If you're a landlord, it's very hard to decide who you want to live on your property. You've spent good money on this home--sometimes you even lived there or had your children grow up there--and now you need allow someone else to use it. If you let the wrong people move in, you can lose money. It's amazing that most rental property owners don't have some sort of formalized procedure that would help protect them from choosing the wrong tenants.

Let's look at this from an abstract point of view. Your property is a way to bring in money each month, but for now let's think of it as a pile of money. You can't get to this money, because it's tied up in purchasing costs and a deposit. You're hoping to take from that pile of cash by renting it out or by selling it. Let's also, of course, imagine that the property has increased in value since you bought it. Now add the cost of your time to that money. You spent time finding the property, fixing it up, and finding a renter. Now you have a lot of money in that pile.

Now pretend that pile of money is sitting in one of the rooms in the house. It's neatly stacked and banded where your renter can get to it. Are you really comfortable giving a set of keys to a stranger and going away for a year? Is this painting a clearer picture of how important it is to pick a good renter? This isn't literally what you're doing, but it's pretty close. You should be aware of your legal rights that help you protect your investment from a less-than-desirable occupant.

And this isn't just about money. We're not just trusting a renter to look after our property, we're trusting them with some of our time. If you're in charge of the rental yourself, you're spending your time making sure that things are going well for them. If the renter doesn't take care of your property, you're going to have to do it. It will take all of your spare time to maintain this house. Don't forget that you'll also have to take time out to collect the rent each month. If you're renter isn't always on time and reliable, you'll spend more energy and deal with more hassle. There's legal protection for property owners, but the paperwork required alone is enough to send you to the loony bin. Most importantly, there's a way to keep you from having to worry about all of this.

One you've established that finding the right renter is seriously important, you can start your search for the perfect tenant. There are two important things you're looking for: Your renter needs to reliably pay the rent on time each month, and they need to be really responsible with your investment.

There are three tools you can use to protect your investment by finding the perfect renter. The first tool is an application that covers "all the bases". You need to get as much information as you can from a prospective renter. Get all the contact information, copy their identification, and get actual proof of their current address--like a recent telephone or utility bill. You also need to get references--an employer is a must as is their current landlord. If they're moving out of Mom's and Dad's house, you need their information too. You also need a good character reference from a professional. They need to provide a reference from a professor or a dentist--not their buddies who work at the grocery store. Providing a reference isn't enough. You actually need to contact these references and make sure that A) they know they're being used as references and B) they actually have positive things to say about the potential renter's level of responsibility. Make sure the details match up correctly.

Step number two is to ask for a deposit that goes beyond the first month. A good number to ask for is 6 weeks. In some areas, laws give the renter extra rights if you ask for more than 8 weeks, so be careful if you ask for more. By making this large of a deposit, you get more assurance that the renter is serious and responsible.

Lastly, you need to rely on your instincts. Make sure your mental alarms aren't going off when you talk to these people. You should spend enough time with them to get a good "read" before you "seal the deal". If you don't feel right, find someone else.

You'll notice that I haven't mentioned a credit check. This is a good tool depending on how much money your potential renters have. Some tenants let you know that they're just getting back on their feet because of a hardship. But for more affluent renters, a credit check is recommended.

Once you have some tools that will help you find a good renter, take a minute to think about why people sometimes pick poor ones. The worst decisions usually get made when the landlord is struggling to find a tenant in a short period of time. It's hard on you financially to leave a property un-rented. When you're losing that money each month, you can be tempted to jump at the first interested person. Lots of property owners have made that mistake. It's even harder if you don't have a lot of people coming to look at your house. If you pay to put an ad in the paper and only get one call, it can look pretty bleak.

So the best thing you can do for your property is to make sure you have a lot of interested potential renters. More people will want to rent from you when you pay attention to several points: Make sure your advertising has a good description of your property and is being listed in a reputable publication. Make sure your rent is reasonable--lower than the competition if you can afford it. Finally, make sure you are doing all you can to keep your reputation as a landlord impeccable.