One of the most crucial factors for success as a landlord is finding good tenants to occupy your property. But what, exactly, counts as a “good” tenant?
Good tenants are those that make your life easier and/or maximize your profitability. They pay the rent on time, consistently. They’re unlikely to move out, leaving you with a vacancy that compromises your cash flow. And they don’t cause many problems for your property or your neighbors—they inform you when something’s wrong, keep the property in good repair, and don’t make too much noise.
But how can you tell which of your appliances would make for good tenants, and how can you find more of them in the first place?
Signs to Look For
While sorting through tenant applications and conducting background checks, these are some of the most surefire signs of a tenant who’s only going to benefit you:
1. A good credit score
A prospective tenant’s credit score can tell you much about their payment history and fiscal responsibility. Credit scores are calculated based on credit history, payment history, available credit, and credit mix, so they can tell you how good a tenant is about paying their bills on time, and how much credit they have available. A credit score in the “good” or “excellent” range is ideal, but a credit score can’t tell you everything. Some prospective tenants won’t have enough of a credit history to tell you much, and others will be in the process of turning their life around.
2. A consistent history of payment
You can make a better judgment on a person’s probability of consistent payment based on how they’ve paid for rent in the past. Recent rent statistics will tell you how serious a person is about paying rent on time in the present, whereas a credit score may be due to actions taken years ago, and may be more due to credit card spending or personal loans. You can call the tenant’s previous landlord to get a feel for their payment history in the past.
3. Steady employment
You should also be looking for proof of steady employment. The longer a person has been working for an employer, the better, and the higher their salary or hourly wage, the better. These are signs that their income is sufficient and unlikely to be uninterrupted—which means there will be fewer excuses for missing the rent payment. You can also call their current employer to see how reliable an employee they are; the more glowing the reference, the more confident you should feel.
4. No criminal history
If your tenant has no criminal history, it’s a sign they try to live a responsible, respectful life—at least to an extent. However, if a tenant has been convicted of crimes in the past, that isn’t necessarily a reason to stop considering them as a tenant. Many people with prior convictions have learned from their past mistakes and are looking to rebuild a life, so make sure you consider criminal history alongside other factors.
5. Good references
You may have contacted some references already when you verified a tenant’s employment or rental history, but make sure you follow up with their other personal references as well—especially if you’re on the fence. Learn more about what the tenant is like, and whether they’d be a good fit for your property.
It’s also beneficial to find a tenant who’s polite. Politeness in your interactions will mean faster problem resolution, and a better overall landlord-tenant relationship. Pay attention to how the tenant words their emails to you, and how they behave when you talk to them face-to-face or over the phone. Are they easy to get along with? Are they respectful?
Honesty is underrated as a tenant quality, and it’s not the kind of thing you can determine from an application. If a tenant lies about their employment history, salary, or other personal information, you should consider it a red flag. Dishonest tenants may be less likely to pay rent on time, may come up with false excuses for missing rent, and may cover up damage they’ve done to the property. Pay attention to what they tell you on their application and in interviews, and look for inconsistencies.
Finally, consider the tenant’s cleanliness and/or orderliness—which can also be difficult to tell. If the prospective tenant is always well-dressed and well-groomed, it’s a good sign they like to keep things orderly in their life. It’s a good indication they take their tenant application seriously, and they’ll probably be better at keeping your property clean and damage-free.
Do keep in mind that perfect tenants don’t exist. Chances are, you won’t find any tenants that have high marks in all these categories, so you’ll have to use your best judgment in the screening and interview process and choose the best possible candidates you can—avoiding the possibility of discrimination at all costs.
You’ll also need to do what you can to keep your good tenants around for as long as possible; after all, it won’t matter if you find good tenants if you end up having too high a tenant turnover rate. Charging fair rent prices, staying amicable, and resolving issues quickly are your best bets here.
Everything comes down to the quality of your tenant screening process. This refers to how you collect tenant applications, how you perform background checks on your applicants, and how you ultimately decide who resides in your property. This can be an overwhelming and time-consuming process, especially if you’re new to being a landlord, but fortunately, there are some key ways to get help.
Contact Green Residential today if you’re interested in outsourcing your tenant screening process. We’ll take care of all the heavy lifting for you, so you can gain the advantages of managing a property with good tenants, without worrying about the difficulties of tenant screening.