To be a successful landlord you need to learn the latest tricks of the trade to attract the best business. Landlords compete in a market where thousands of renters gather to look for the latest in apartment amenities and quality service. To keep your property up to date with the current market, here are the three tips you must know.
A Rigorous Screening Process is Key
It may seem like a given, but it’s worth repeating. The screening process is the single most important determiner of your success as a landlord. Your relationship with your tenants will make or break your business. You want someone with upstanding character, responsibility and integrity. This person will pay rent on time, treat your property with respect and obey your rules. Look for the following in your tenant background searches.
- Credit Score. A renter’s credit history is a good indication as to whether they’re responsible enough or are in the right financial position to afford to pay rent. A poor credit score might indicate that the person uses money irresponsibly and doesn’t know how manage funds. Low credit scores also show up with young renters, in which case you may opt for a cosigner. Learn how to run a credit check on a tenant to help you make a better decision.
- Income. Combined income determines whether they can afford to pay their rent on time from month to month. Typically, renters must make at least three times the requested amount. This accounts for any budgetary concerns and emergencies that take place during this time.
- Eviction History. An eviction on a tenant’s record signals a red flag. Those who’ve been evicted have disrespected rules, caused damage to property or neglected to pay rent. A landlord must jump through many hoops to evict a tenant, so if this person has an eviction on their record this is a bad sign. If you have multiple candidates expressing interest in your property, it’s time to weed those people out.
- Criminal History. Every landlord has a different threshold of how much criminal history they allow a tenant to have. Background checks are an easy way to access a candidate’s criminal history and determine whether that’s acceptable to them. Generally, landlords discriminate based on the nature of the offense and how recently it was committed. Many landlords screen tenants who have less than two offenses in five years. Some states provide incentives to landlords who provide housing to convicts, so look up your local state legislature to see their offer.
- Referrals. Referrals aren’t mandatory but they can provide useful information. If you’re screening a tenant who hasn’t rented before, request referrals to get an idea of their character. On the other hand, not all referrals are legitimate and may have been written by close friends or even themselves.
Budget for Repairs and Maintenance
You can never save enough money to anticipate repairs. Should the worst happen–like burst pipes or electrical malfunctions– it’s best you act fast. Build an emergency fund now to prepare for the inevitable repairs and maintenance you’ll perform on the property throughout their stay. If you have a knack for DIY repairs then make sure to have a toolbox handy. If this isn’t your skill-set, keep in contact with a reliable repair person who lives near the property to help at any time.
Communication is Key
Nobody likes a landlord who’s difficult to access. You should always have your phone ready and your email notifications on in the event that something happens. If you have good tenants, it’s better to treat them with respect and keep them than to have them leave. If they leave, you may go for a month or more without tenants and you’ll have to fit the bill. Prevent this from happening by maintaining good communication with your tenants and responding to them as soon as possible. Tenants who feel supported, respected and cared for are much more likely to stay and give you a steady income for years to come.
Use these basic strategies as a landlord to get the most out of your rental business.