When it comes to renting out your property, finding the right tenant is crucial for a smooth and successful landlord-tenant relationship. A great tenant can ensure timely rent payments, take care of your property, and respect the terms of the lease. We did a deep dive with some of the top property management companies to compile a list of best practices when selecting a great tenant.
1. Good Credit History
A good credit history is a crucial quality to look for in a great tenant. It indicates their financial responsibility and their ability to pay rent on time. A tenant with a strong credit history is more likely to honor their financial obligations and maintain a consistent payment schedule. It also demonstrates their reliability and commitment to meeting their financial commitments. By selecting a tenant with a good credit history, landlords can minimize the risk of late or missed rent payments, ensuring a steady and predictable income stream.
How to check a tenants credit.
To obtain someone’s credit history, a landlord can conduct a credit check with the potential tenant’s permission. There are several ways to do this, including using a credit reporting agency or running a credit report online.
Credit Agency: If a landlord chooses to use a credit reporting agency, they will need to provide the tenant’s personal information, such as their full name, social security number, and date of birth. The agency will then provide a credit report that includes the tenant’s credit history, including their payment history, outstanding debts, and any negative marks, such as bankruptcies or foreclosures.
Credit Services: Alternatively, a landlord can use an online service to run a credit check on a potential tenant. These services often require the tenant’s consent and may charge a fee for the report. However, they can provide a quick and convenient way to assess a tenant’s credit history.
đź’ˇ Note: It’s important to note that landlords must comply with federal and state laws when obtaining a tenant’s credit report, such as obtaining written consent and providing the tenant with a copy of the report. Additionally, landlords must treat all tenants equally and not discriminate based on credit history or other protected characteristics.
4. Stable Employment
Stable employment and income are essential qualities to seek in a great tenant. A tenant with a reliable source of income is more likely to afford the rent consistently and on time. A stable employment history indicates their ability to maintain a steady income and meet their financial obligations. Landlords can feel confident that a tenant with stable employment is less likely to face sudden financial difficulties that could impact their ability to pay rent and more likely stay in the rental property for a longer duration.
How to check an tenants employment history.
To check someone’s employment history, a landlord can ask the potential tenant to provide proof of their employment. This could include a letter from their employer, a recent pay stub, or a W-2 form. This will provide the landlord with important information about the tenant’s job, such as their position, salary, and length of employment.
References: Another option is to conduct a reference check with the tenant’s employer. The landlord can reach out to the employer directly and ask for confirmation of the tenant’s employment status and income. Some employers may require written consent from the tenant before providing this information.
đź’ˇ Note: It’s important to note that landlords must obtain the tenant’s permission before contacting their employer or obtaining any employment-related documents. Additionally, landlords must comply with all applicable laws and regulations, such as fair housing laws, to avoid discrimination based on employment status or other protected characteristics.
Verifying a potential tenant’s employment history can provide landlords with peace of mind, as it helps to ensure that the tenant has a stable source of income and is more likely to pay rent on time. By selecting tenants with stable employment and income, landlords can reduce the risk of missed or late rent payments and maintain a consistent income stream from their rental property.
3. Positive Rental History
A positive rental history is a highly desirable quality to look for in a great tenant. It indicates their track record of being responsible and reliable tenants in the past. A tenant with a positive rental history is more likely to pay rent on time, take care of the property, and adhere to the terms of the lease agreement. Contacting previous landlords for references can provide valuable insights into their rental behavior and overall satisfaction as tenants. By selecting a tenant with a positive rental history, landlords can have peace of mind knowing that they are likely to maintain a good relationship and uphold their responsibilities as tenants.
How to check rental history.
To check someone’s rental history, a landlord can ask the potential tenant to provide references from previous landlords or property managers. These references can provide important information about the tenant’s behavior, such as whether they paid rent on time, took care of the property, and followed the terms of the lease agreement.
References: The landlord can contact these references directly to ask for their feedback about the tenant. This can be done via phone, email, or letter. Some landlords may require written consent from the tenant before providing this information.
Rental Reporting: Another option is to use a rental history reporting service. These services provide a database of rental histories that landlords can access to verify a potential tenant’s rental history. These services often require a fee and the tenant’s consent to access their rental history.
đź’ˇ Note: It’s important to note that landlords must obtain the tenant’s permission before contacting previous landlords or using a rental history reporting service. Additionally, landlords must comply with all applicable laws and regulations, such as fair housing laws, to avoid discrimination based on rental history or other protected characteristics.
Verifying a potential tenant’s rental history can provide landlords with valuable insights into their behavior as tenants. By selecting tenants with a positive rental history, landlords can reduce the risk of late or missed rent payments, property damage, or other issues that could negatively impact the rental property.
4. Clean Background Check
A clean background check is an important quality to prioritize when searching for a great tenant. It signifies that the tenant has no history of criminal activity that could jeopardize the safety and well-being of the property and other tenants. Conducting a thorough background check helps ensure a secure and peaceful living environment. By verifying a clean background, landlords can minimize the risk of potential legal issues or disturbances caused by tenants with a criminal history. It also demonstrates the tenant’s credibility and integrity, enhancing their suitability as responsible renters.
How to obtain a background check.
Obtain Consent: Before performing a background check, landlords must obtain written consent from the tenant, as required by law. The consent form should outline the type of background check being conducted, how the information will be used, and who will have access to the information.
We like the one from EZ Landlord Forms: Here.
Screening Service: Landlords can hire a reputable screening service to conduct a background check on the potential tenant. The service should be able to perform a criminal record check, credit check, and employment verification.
Verify Identity: Landlords should verify the identity of the potential tenant by requesting a government-issued ID, such as a driver’s license or passport.
Record Check: A criminal record check is essential to verify that the potential tenant has no criminal history that could pose a threat to the property or other tenants. The screening service can perform a criminal record check at the local, state, and federal levels.
đź’ˇ Note: It’s important to note that landlords must comply with all applicable laws and regulations when performing a background check, such as the Fair Credit Reporting Act (FCRA) and state and local laws regarding tenant screening. Additionally, landlords should use the information obtained from a background check to make informed decisions about tenant selection and avoid discrimination based on protected characteristics.
5. Respect for Property
Respect for property is a crucial quality to seek in a great tenant. It means they will treat the rental property with care and maintain its condition. A tenant who respects the property is more likely to promptly report any maintenance issues and take proactive steps to prevent damage. They understand that the property is not just a place to live but also an investment that needs to be preserved. With a respectful tenant, landlords can feel confident that their property will be well-maintained, reducing the need for frequent repairs and minimizing expenses.
đź’ˇ Note: There is no sure-fire way to know this upfront, but pay special attention when doing your checks with the potential tenants references.
6. Responsible Communication
Responsible communication is an essential quality to look for in a great tenant. It entails clear, prompt, and professional communication between the tenant and the landlord. A tenant who communicates responsibly will promptly report any maintenance issues, provide timely rent payments, and address any concerns or questions in a respectful manner. They understand the importance of effective communication in maintaining a positive landlord-tenant relationship. With responsible communication, landlords can efficiently address any issues that may arise and ensure a smooth and efficient rental experience for both parties involved.
How to check for good communication in advance.
One way to gauge a tenant’s communication level prior to renting to them is to assess their communication skills during the screening process. Here are some tips for assessing a tenant’s communication level:
Review Their Application: Reviewing the tenant’s application can provide insight into their communication level. Look for clear and concise answers to questions and detailed explanations for any gaps in employment or rental history.
Response Time: Pay attention to the tenant’s response time during the screening process. A prompt response to phone calls, emails, or text messages indicates good communication skills.
Request References: Contacting the tenant’s references can provide valuable insights into their communication skills. Ask the references about the tenant’s responsiveness, clarity, and professionalism in their communication.
đź’ˇ Note: It’s important to remember that effective communication is a two-way street. As a landlord, it’s essential to communicate clearly and promptly with tenants to build a positive landlord-tenant relationship. By assessing a tenant’s communication level during the screening process, landlords can ensure that they select tenants who are responsible and effective communicators.
7. Compatibility With Lease Terms
Compatibility with lease terms is a key quality to consider when looking for a great tenant. It involves finding tenants who thoroughly understand and agree to the terms outlined in the lease agreement. A compatible tenant will respect and adhere to the rules, restrictions, and obligations specified in the lease. This includes paying rent on time, following any pet or occupancy limits, and taking responsibility for property maintenance. By selecting tenants who are compatible with the lease terms, landlords can foster a cooperative and harmonious living environment, minimizing conflicts and ensuring a positive rental experience for all parties involved.
How to know if your tenant is compatible.
Provide A Detailed Lease Agreement: A detailed lease agreement that outlines all the terms and conditions of the rental agreement is essential. Ensure that the tenant understands and agrees to the terms outlined in the lease.
Ask Questions During The Screening Process: Ask questions during the screening process to ensure that the tenant understands and agrees to the lease terms. For example, ask about their pet ownership, smoking habits, or any plans for subletting the property.
Conduct A Pre-Inspection: Conducting a pre move-in inspection with the tenant can help ensure that they understand the property’s condition and their obligations regarding maintenance and repairs.
đź’ˇ Note: It’s important to ensure that the lease agreement is clear and comprehensive to minimize confusion and misinterpretation. By selecting tenants who are compatible with the lease terms, landlords can create a cooperative and harmonious living environment and minimize conflicts that could arise due to misunderstandings or disagreements about the lease.
8. Financial Responsibility
Financial responsibility is a critical quality to prioritize when seeking a great tenant. It demonstrates their ability to manage their finances effectively and meet their financial obligations, such as paying rent on time. A financially responsible tenant will have a reliable source of income and a track record of fulfilling their financial commitments. They understand the importance of budgeting and prioritizing rent payments. By selecting a financially responsible tenant, landlords can minimize the risk of late or missed rent payments and ensure a steady and consistent rental income.
Its best to fall back on your reference list to get a good gauge of how your tenant will handle the financial responsibilities. It’s a safe bet, that if the renter has decent credit and a job that they will pay rent on a regular cadence. That said, there are always outlier situations where this might not be true but putting good safe guards in place to address challenges will give you the security needed to protect your asset.
9. Respectful of Neighbors
Being respectful of neighbors is a key quality to look for in a great tenant. A respectful tenant understands the importance of maintaining a peaceful and harmonious living environment. They are considerate of their neighbors’ privacy, follow community rules and regulations, and keep noise levels in check. They prioritize being good neighbors and contribute positively to the overall atmosphere of the property. By selecting a tenant who is respectful of neighbors, landlords can help foster a pleasant living experience for all residents and reduce the likelihood of disputes or conflicts arising from disruptive behavior.
This is another area that should be addressed during the screening process from the reference list. Feel free to ask questions like: “Did you have any neighbors report issues with this tenant?” Those will typically uncover any glaring issues that could arise.
10. Long-Term Rental Intentions
Long-term rental intentions are a desirable quality to seek in a great tenant. A tenant with long-term rental intentions is more likely to provide stability and consistency in occupancy. They are interested in establishing a home and are less likely to seek frequent relocations. This reduces the turnover rate, which saves landlords time and effort in finding new tenants. Long-term tenants also contribute to a sense of community within the property, fostering stronger relationships between neighbors. Additionally, landlords can benefit from a reliable rental income stream by having tenants who are committed to staying for an extended period.
How to know your tenants intentions.
Rental History: During the tenant screening process, landlords can ask potential tenants about their past rental experiences, including how long they stayed at each property. This can provide insights into their rental behavior and whether they tend to stay at one place for an extended period.
Employment Status: Tenants with stable and secure jobs may be more likely to commit to a long-term rental agreement. Landlords can ask about their current employment situation, including how long they have been with their current employer and if they foresee any changes in their employment status in the near future.
Discuss Their Future Plans: Landlords can also ask potential tenants about their future plans and goals. For example, if a tenant is looking for a stable home while they finish their studies or save up for a down payment on a house, they may be more likely to commit to a long-term rental agreement.
Offer A Longer Lease Term: If a landlord is looking for a long-term tenant, they can consider offering a longer lease term, such as a two or three-year lease. This may attract tenants who are looking for stability and security in their housing situation.
đź’ˇ Note: Offering a longer lease agreement could be a great way to increase occupancy, but if you land a bad tenant you could be stuck with them longer than you would like.
Last Thoughts
Remember, finding a great tenant is a crucial step in successful property management. By considering these 10 qualities during the tenant screening process, you can increase the likelihood of finding responsible, reliable, and compatible individuals who will take care of your property and make renting a positive experience for everyone involved.
Best of luck!
