How to Select The Right Tenant For Your Property
Finding the appropriate tenant is needed for a smooth rental experience as a landlord. Still, with different people applying to rent your property, narrowing your choices and choosing the most suitable tenant can be daunting.
Not only must that tenant pay the rent on time each month, but ideally, they should also care for and respect your property.
Finding a tenant to lease your property requires careful thought and consideration, which we’ll outline here in this article.
Here you will discover critical steps you need to follow to find an ideal match and avoid future hardship.
What Makes for an Ideal Tenant?
A quality tenant meets specific criteria and displays qualities that make them desirable as tenants for landlords like yourself. Factors contributing to being an excellent tenant could include:
Responsible and Reliable
An excellent tenant pays rent promptly and thoroughly each month, meeting their financial obligations as promised. They care reasonably for the property as they should and promptly report any maintenance issues.
An ideal tenant maintains open and transparent communication with you so you are updated about any changes or concerns about the rental property.
An ideal tenant demonstrates their financial responsibility by having an uninterrupted source of income and paying rent regularly.
An ideal tenant adheres to all local laws and regulations related to renting and property use.
No Criminal Background
Finally, having no prior convictions from a background check shows that your tenant follows all laws and can be trusted to create a safe living space for everyone involved.
Tenant Selection Process
A tenant selection process refers to the steps and criteria landlords or property managers use when selecting tenants for their properties.
Tenant selection usually involves taking several steps to evaluate and select suitable applicants. However, this process may depend on local laws, regulations, and individual landlord/property management company policies.
Common tenant selection steps include:
- Advertising the rental property
- Accepting rental applications from potential tenants
- Conducting background and credit checks
- Verify employment/income
- Check references from previous landlords
Equal Opportunity Act
In some countries, the Equal Opportunity Act or Fair Housing Act prohibits discrimination based on specific protected characteristics in housing matters.
It ensures that landlords or property managers do not discriminate against prospective tenants on grounds such as race, colour, religion, sex, national origin, familial status or disability when selecting tenants.
According to this act, tenants should be treated fairly and equally when selecting tenants for rental properties. You cannot deny anyone from renting property due to protected characteristics, nor should different terms or conditions be placed upon other people based solely on those protected characteristics.
The Equal Opportunity Act promotes equal housing access and seeks to eliminate discriminatory practices within the housing market.
Landlords should become familiar with this act to avoid discrimination when selecting tenants for lease agreements.
An in-depth rental history gives valuable insights into a potential tenant’s reliability and trustworthiness, so consider having one before making your choice:
- Payment History: A tenant’s rental history provides insight into whether they make timely rent payments and maintain the property well.
- Lease Compliance: An assessment of rental history provides evidence of compliance with lease regulations.
- Stability and Longevity: Tenants with an established rental history with longer tenancy durations demonstrate strength and commitment by remaining at one location for an extended period.
Pets Owned By Tenant
There can be several reasons that lead to you questioning tenants about whether you want pets in your rental property.
You might place particular breed or pet restrictions due to potential property damage and noise disruption caused by animals.
By gathering information about pets, you can assess any associated risks to your rental properties and make informed decisions to limit potential liabilities.
Tenant Credit Score
An important consideration when selecting tenants is their credit score, as it provides invaluable insight into their financial responsibility and ability to pay rent on time.
Considering an applicant’s credit score can help assess potential risks and reliability. A tenant with excellent financial responsibility could benefit from having their scores reviewed.
Conversely, having an inadequate credit score could signify late payments or defaults, as well as financial instability.
Purpose Behind Their Move
Before agreeing on a tenant, you must understand their reason for moving homes.
- Understanding their Intentions: Knowing why someone moves into your property can indicate their commitment and reliability.
- Assessing Suitability: Knowing why tenants move can help determine if their new rental meets their requirements.
Tips on Selecting Tenants
Advice on finding reliable tenants to rent your property can be beneficial. Such guidance includes:
Meeting Them in Person
Meeting potential tenants directly is an invaluable experience that allows you to:
- Assess compatibility between personality and behaviour
- Establish trust as you and the tenant can ask each other questions, clarify expectations, and build rapport together.
- Property viewings allow you or property management companies to present the rental space directly to prospective tenants.
- Meeting in person provides the ideal way to verify a tenant’s identity. You want to ensure the same individual applying for your rental property will occupy it as promised.
Following up with their References
As a landlord, you should verify a tenant’s references to assess whether the information provided about employment history, previous rental history and personal character matches up.
Follow-up on references is another effective way to uncover any red flags or potential problems not disclosed by tenants, helping you assess their level of responsibility, cleanliness, and adherence to rules.
Receive upfront payment when uncertain
An upfront payment might provide peace of mind if a tenant’s reliability is unclear. It will assure you that there are sufficient financial means to cover rent payments on time.
This lowers risks of nonpayment or late payments that could otherwise become significant obstacles to managing an asset effectively.
Additionally, an upfront payment demonstrates a tenant’s dedication to fulfilling their agreement with you, the landlord.
Lease Agreement Signed by Both Parties
There can be many advantages associated with signing a lease agreement by both parties involved, such as:
- Legal protection: By signing a lease agreement between both of you, you will abide by its terms and conditions.
- Clarity and Understanding: Both you and the tenant acknowledge having read, understood, and agreed with all terms and conditions outlined within. This ensures any potential misinterpretations are avoided or minimised.
- Proof of Agreement: Signed lease agreements serve as tangible evidence between you and the tenant that all terms agreed upon have been satisfied.
- Financial Security: These agreements typically contain details regarding rent amounts, payment schedules, security deposits and any other financial considerations related to renting space.
- Establishing Rules and Expectations: Your tenant will understand expectations regarding pet policies, noise restrictions, maintenance responsibilities and any terms unique to the rental property.
Tuning in to Gut Feelings and Instincts
At times, your intuition can help guide your decision when you use nonverbal cues as evidence to support it.
- Body language, tone of voice and overall demeanour provide useful clues into a tenant’s character that should all play into how well their decision goes through.
- Experience-based intuition. You may gain intuitive knowledge after spending enough time in the rental business. Maybe similar situations have arisen before, which can provide some guidance in making informed decisions.
- Trust your instincts. Ultimately, the tenants you select should leave you feeling secure. Trusting your intuition may bring peace of mind while mitigating potential stress or conflicts caused by mismatched tenants-landlord relationships.