4 Ways to Find Good Tenants for Your Rental Property

Leasing rental properties is an excellent way to beat inflation and build wealth over time. However, many obstacles can prevent you from achieving your goals, such as finding good-paying tenants that can help you keep up a positive cash flow every year.

If you’re familiar with the real estate investing industry, you have probably heard horror stories of property managers or landlords evicting a renter after just one year because of not paying their rent or other violations. In fact, data show that over 3 million eviction notices were filed in 2009 because a renter was not paying his/her rent on time or the total amount. Moreover, more than a million tenants faced eviction for violating their lease agreement by having unauthorized pets or guests living with them without the knowledge of their landlords or property managers.

Here are practical tips that can help you find good tenants and double your income in the coming years:

1. Research Your Community’s Average Credit Scores

Before showing any homes for rent, you should know the average present credit score for homes in your community by purchasing a report from one or more of the national credit bureaus, including Equifax, TransUnion, and Experian. This allows you to have an idea of the kind of qualified tenants you can expect based on your property’s monthly rent.

For instance, if you own a house in California that rents for $2,000/month with a credit score minimum requirement of 650+, chances are it will attract people with higher incomes, including doctors and lawyers. But if you have a duplex in Texas leasing for $900/mo and requiring at least a 620 credit score, it will most likely be rented to blue-collar workers earning an average income and may not afford the additional monthly expenses.

Moreover, consider leasing multiple properties in one area. This makes you save money and time while increasing your chances of finding good renters. The last thing you want is to lease houses or apartments scattered all around town that cost you money in car repairs from always driving from one place to another.

For instance, if you live in Huntersville, stick to renting properties in the area. This may also be useful if you plan to hire a Davidson properties management company.

2. Ensure Your Prospective Tenant Can Afford Your Rental Home

No matter how great your property may look to people considering living there, it becomes useless if they don’t meet your credit score requirements. Even if there is a chance they may qualify for a lower credit score, avoid showing anything until after pre-approval. This lets you eliminate potential renters who only have an income stream from which they can afford less than what your rental home requires in monthly rent payment.

3. Always Check Their Credit Score, Not Only Their Credit Report

Credit reports could cause many people to be denied access to a new apartment or rented house, even though there might be nothing that could prevent them from being approved for tenancy. In some cases, tenant applications are returned due to simple name misspellings or incorrect ages listed on the credit report. But their actual applicant’s credit score is more than enough to ignore such mistakes.

Be sure that you always check a prospective tenant’s credit score and not just their credit report. Doing so will give you an acceptable limit for who may qualify to rent your property and who should be avoided entirely.

4. Use a Property Management Company

Most people don’t know that they can benefit from property management companies like this Alarca property management agency. There are many reasons why working with these companies is your best decision. The most important reason is a liability. If your renter gets hurt on the property and sues you, there’s no way you could ever come close to affording what they’d win in court. 

Here are some benefits of hiring a property management company for your rental investments:

• They have insurance 
• They manage your tenants 
• They inspect your units
• They manage repairs
• They manage rent collection 
• They handle evictions 
• They handle accounting 
• They make leases easier 
• They deal with legal matters 
• They look for tenants
• They do everything else instead of you

Choosing the Right Property Manager

Many owners hire a company specializing in tenant placement or real estate asset management rather than an individual. Finding out the firm’s experience and connections with local lenders and insurance agents can be extremely helpful if this is your case. Some of the most experienced companies specialize in specific market segments, such as high-end rentals or student housing. 

Start looking at their website for information. Most companies list the services they offer and any certifications or specialties. A client portal can sometimes be helpful as well, depending on what you’re looking for. If you’re looking for a reputable agency, you may visit Alarca Property Management – one of the best property management companies in Charlotte NC.