The apartment you’re considering renting out is a great investment opportunity and difficult to pass up. But before you sign the lease on your new, potentially lucrative property, it’s important to consider the potential risks of renting to strangers.
If you suspect someone might cheat on their rent without notice or cause damage inside or outside of your unit upon occupying it, then having an experienced and generous tenant representative can be vital. In this blog post, there shall be five tips for properly screening potential tenants who will come into contact with your building.
1. Meet Them Face to Face
It is the best way to gain the trust of your potential tenants, and for you to meet them is always a good idea. Being faced with a stranger who has no positive feelings or intentions towards you or your building is never going to be a pleasant experience, especially when they’re looking at you with anger in their eyes.
But it’s important to be present and ready to greet them. If they’re willing to travel long distances and spend hours doing so, they probably deserve both your respect and consideration; if not, then don’t bother making contact.
2. Verifying Employment
It’s also important to verify that the person is employed by filling out a form and sending it to the prospective tenant so they can provide proof of employment. It will help them decide whether or not they would be financially able to hold down a job in your community and take care of their financial obligations. In some aspects, this will also prevent them from being able to use the fact that they are unemployed as a means of obtaining housing illegally.
You may not be as concerned with a potential tenant’s financial background as you are about their criminal history. But by looking at a potential tenant’s references, you can also screen individuals who may have wronged them in the past.
If the landlord asks for references and the potential tenant offers none, that is an instant warning. These references will also help confirm whether or not they are reliable and responsible when it comes to holding down a job and managing their finances responsibly.
4. Background Check
A background check can tell you whether or not someone has been found guilty of any crimes in the past seven years alone or whether they were arrested at all. Once again, working with the tenant representative and making sure that they have filled out their paperwork correctly is vital during this process.
5. Credit Check
A credit check can help you determine whether or not a potential tenant has been declared bankrupt, has bad credit due to previous financial problems, or is currently paying off debt. It will help you identify if they are a worthy tenant and are likely to make it to the end of the lease term without causing any problems for the building.
Screening tenants may sound like a time-consuming process, but when it comes to free cash flow, it can be well worth your time. Of course, there are always exceptions, so if you feel no one seems trustworthy enough, the recommendation is to obtain an attorney and take legal action against the tenants in question. This way, you can protect your investment and prevent problems from developing.