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Best Practices in Finding Quality Tenants, by Harold Willig

A vacant property is a property that’s costing you money, and it’s not just the rental income. An empty property must be maintained, still requires property taxes to be paid, and always requires marketing.

Whether you manage your own properties or have a professional property management firm do the heavy lifting, the best practices in finding quality tenants is described below.

Demographics

First order of business is to describe your ideal tenant. What is their persona? Do they have stable employment? Do you allow smokers, or pets? Whatever your needs, get a clear idea of them before you begin interviewing applicants, or have your management firm do it for you.

Advertising

Pictures, pictures, pictures. In addition to the basics – monthly rent, security deposit, number of bedrooms, square feet - what renter doesn't want to know about your properties’ curb appeal, spacious bedrooms, updated kitchen, and big back yard? You can advertise on national sites like Realtor.com, Craigslist, Trulia, or Zillow, or with your local realtors. And the old-fashioned way works too: you can put a “for rent” sing in the front yard.

Credit Check

The credit check is a basic screening requirement. You can run one yourself as the property manager, or if you have a property management firm, they will run it. Potential tenants can self-screen as well by running their own credit, through LifeLock, Credit Karma, and a host of other means. The big three credit rating agencies, Equifax, Experian and TransUnion, let tenants get their own credit report.

The credit report will tell you if your prospect has big or small balances, short or lengthy credit history length, and the types of credits used. (If you run the report yourself, you’ll need to be credentialed as a property manager.)

Background Check

The obvious: screen for evictions and criminal history. Get personal and professional references. Talk to previous landlords.

Referrals

You can also use your current tenants to draw in potential tenants. Try rewarding tenants who bring in new renters with a cash rewards, a gift card, or a rent reduction.

Social Media

If you’re a do-it-yourselfer, you may also want to look at your applicant’s LinkedIn page to verify their employment history; and Facebook, Twitter and Instagram accounts to take their measure. Or make sure your property management firm does the same.

Be Advised

Your selection process must of course be mindful of the federal Fair Housing Amendment Act, and within local and state discrimination laws. Treat each applicant fairly and equally. Keep all paperwork for at least two years.

Or Try Investing in A Fund

Another option for serious investors is to consider investing in a professionally managed portfolio of single-family homes. As an investor, you may receive the benefits of income plus appreciation, and can leave the property management to the Fund. Please contact Harold Willig at 917-209-4452 for more information.

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