What Makes an Ideal Tenant for Your Rental Property?
Finding good tenants is often the primary concern of those planning to rent out their property. Screening potential tenants is an important part of the rental process, but it can be difficult to know what to look for. Below are 10 qualities that indicate someone will be an ideal tenant for your rental property. Using a property management company can expedite this process, ensuring you find high-quality tenants who have been vetted by realty management professionals in a timely manner.
Why Is It Important to Find Good Tenants for Your Rental?
While filling a vacancy is important for your bottom line, renting to bad tenants can hurt you in the long run. Here are three reasons why it’s important to find good tenants.
- You want to protect your investment. As the property owner, you want tenants who will respect the residence. The last thing you need is a bad tenant who damages the property or does not keep up with their maintenance responsibilities. You have invested time and money into the property, and you need tenants you can trust will treat it like it is their own.
- Good tenants provide peace of mind. Good tenants do not just offer steady income—they also offer peace of mind. You will have a much better experience as a landlord if you know your tenants will pay on time, communicate issues in a timely manner, and respect the property and terms of the lease.
- You want to avoid eviction. Having good tenants helps you avoid the hassle of eviction. If you have bad tenants who are delinquent on rent, damage the property, or break the lease terms, you may have no choice but to evict them. The eviction process can take around 39-90 days (determined on an individual, case by case basis), though, and involves more than loss of income. You will also have to pay legal fees, and in some cases, attorney fees, alongside the cost of repairing any damages caused by the tenants. To avoid this at all costs, you need to be diligent in screening potential renters or hire a property management company to do it for you.
10 Qualities of an Ideal Tenant for Your Rental Property
How do you determine if a potential tenant will be a dream or a nightmare? Here are 10 signs to look for in the screening process that indicate the applicant will pay on time, communicate respectfully, and take good care of your property.
1. Steady Income
An ideal tenant will be able to provide paystubs showing he or she makes roughly three times the monthly rent. According to the U.S. Census Bureau, an individual’s housing costs should not exceed 30% of their income; any more than that is considered a “housing-cost burden.” If a potential tenant cannot provide evidence of sufficient income, it may be a sign that they will have trouble paying their rent.
2. Good Credit
It is important to look beyond a potential tenant’s income to get the full picture of their finances. Their credit score can be a good indication of their overall level of financial responsibility. Have they established good credit over time? If they have debts, do they manage them well and make on-time payments? Have they ever filed for bankruptcy? These are all things that will be reflected in their credit report. A home rental management company like TRGhouses runs credit checks on potential tenants as part of our services to property owners, ensuring you can find financially responsible tenants for your rental.
3. Positive Referrals
Ideal tenants will have good referrals from previous landlords. One of the best indicators of whether someone will be a good tenant is how they treated their past rentals. If a tenant left their last rental on bad terms, this is a red flag. Ideally, a potential renter will be able to provide references from at least two landlords that indicate they paid on time, communicated respectfully, and took good care of the property during their stay.
A potential tenant is honest in their application. Someone who hides a criminal record or lies about their current employment is likely not someone you want to entrust with your rental property. Our North Texas property management company runs background checks and employment verification to assure owners that what potential tenants said is true and that they can be trusted.
5. Respectful of the Lease Terms
A lease is a contract detailing the terms by which you are allowing tenants to occupy your property. Ideal tenants respect the terms laid out in a lease agreement, whether that means following a no-pet policy, being mindful of their noise levels, and/or asking for permission before painting or doing other renovations. While most landlords are fine with their tenants hosting guests, good tenants do not become long-term hosts for individuals who are not on the lease. Respecting the number of residents detailed in the lease reduces wear-and-tear on the property. It also gives landlords peace of mind, knowing that the individuals who maintain a residence on their property are all people who underwent their screening process. Speaking with previous landlords is a good way to determine whether a tenant will respect the terms of the lease.
Good communication throughout the application process is a strong indicator that a tenant-landlord relationship will be a positive one. When you have entrusted someone with your property, you want to know that they will communicate any issues in a timely, respectful manner. A good tenant will quickly notify you about urgent maintenance issues, which helps you protect your investment from costly damages. They will also be honest if their financial situation changes or will provide adequate notice if they are planning to vacate the property.
While some routine maintenance is the responsibility of the landlord, many things fall on the tenants’ shoulders, too. An ideal tenant will take ownership of their responsibilities for maintaining the property, as detailed in the lease. This can include lawn care, cleaning, and keeping the property free of rubbish, for example. A good tenant will recognize their responsibilities (e.g. trash removal) before it becomes an issue the landlord needs to become involved with (e.g. pest removal). In most cases, tenants are responsible for managing the utilities of the property as well. Before new tenants move into the rental, our North Texas property management company requires them to show that they have set up these utilities to be billed in their name, ensuring they know that these are their responsibility, not yours.
8. Renters Insurance
Having renters insurance is another sign of a responsible tenant. Not only does this protect the tenant’s belongings, it also helps reduce your potential liability should something go wrong. If they do not have it, you run the risk of them trying to blame you for any issues that led to the damage of their possessions. Your tenant’s renters insurance can also help you financially in the event of something like an accidental fire, because it may help cover your insurance deductible.
Stability is another quality to look for in a potential tenant. If someone has a history of job-hopping and moving rentals every year or so, this may be a sign that they are unreliable. Someone with a steady job and ties to the local community, however, is more likely to stick around. As a property owner, you want reliable tenants as much as they want a reliable landlord, so looking for signs of stability is important.
10. Renews the Lease
Finding good tenants can be a lot of work, so you do not want to go through this hassle every time the lease is up for renewal. An ideal tenant for your rental property will want to stick around. When screening potential tenants, you can look at how long they stayed in their last rental and ask why they decided to move. Do they move often for work, or were they looking to upgrade or downsize? You can also see if tenants are interested in lengthening the terms of the lease from the start, such as signing an 18- or 24-month lease instead of a 12-month one.
Our North Texas Property Management Company Can Help You Attract the Ideal Tenant
Finding the ideal tenants for your rental property might sound complicated. This is where a property management realty group can be a big help. TRGhouses’ home rental management helps you attract and keep ideal tenants for your North Texas rental property, all while decreasing the length of vacancy between rentals. Our property management services include thorough screening of tenants that covers many of the areas of concern mentioned above. This includes running a credit report, performing a background check, and verifying employment and rental history. We manage the logistics of executing the lease, coordinating smooth check-in procedures, and collecting rent, among many other services that make your experience as a landlord much easier. We also have a retention policy that helps attract long-term tenants to your property.