Following this step-by-step guide will help ensure you find the best tenants for your rental property.
Finding good renters is something many property owners wonder about, especially if they’re new to owning apartments or other rental property. Choosing the best renters is crucial to your success as a property owner, but it can also be challenging. Finding a tenant requires careful screening and due diligence on your part.
What really makes a great renter? Someone who pays their rent on time each month ensures that you have a steady stream of money coming in. But cash flow isn’t everything. You also want someone who will take care of the property, communicate with you, follow all of the lease provisions and stick around for as long as possible.
The average tenant lives in a rental unit for just over two years. So, creating a streamlined process for advertising your rental and finding, screening and selecting tenants will save you time when a tenant moves out and help you rent the unit to someone else more quickly.
These 11 steps for how to find renters for your apartment community will help.
1. Get familiar with local tenant laws
Landlord-tenant laws vary widely by state and even sometimes by city and county. The laws often specify property requirements and the responsibilities of the property owner. Before you start advertising your rental and looking for tenants, it’s a good idea to familiarize yourself with local rules and regulations.
Additionally, you must follow the federal Fair Housing Act, which protects people from discrimination when renting a home. The law prohibits discrimination in housing based on the following protected classes:
- Race
- Color
- National origin
- Religion
- Sex
- Familial status (for example, people with children or single parents)
- Disability
2. Consider hiring a property manager
If you’re new to owning rental property, hiring a property manager may be a worthwhile investment. Property managers are experienced in the local real estate market and know how to find renters quickly and effectively. They advertise the property, show it to potential tenants, review applications, screen tenants and get leases signed.
Once a tenant moves in, a property manager will take care of the day-to-day aspects of the rental, including coordinating repairs and answering questions. Property managers typically charge between 5 percent and 10 percent of the monthly rent, according to HomeAdvisor. But it might be worth it if it will save you time and a few headaches.
3. Create a detailed rental ad
Writing a detailed, unique ad for the rental attracts attention and helps find tenants quickly. Make sure your advertisement includes:
- A description of the property
- Number of bedrooms and bathrooms
- Details about property amenities like a pool or playground
- Rent price
- The date it is available
- Your contact information
- Several accurate, high-quality photos of the home
Be sure that your ad follows all local landlord-tenant laws and the Fair Housing Act. The law prohibits ads that suggest a preference, limitation or discrimination based on race, color, religion, sex, disability, familial status or national origin.
4. Price the rental competitively
Deciding how much to charge for rent can be challenging, especially as the real estate market remains in flux. The average rent for an apartment is up about 20 percent over the past year, according to Apartment Guide.
Just because rent prices are going up doesn’t mean you can or should charge exorbitant prices. Pricing the rental property competitively is the best way to find renters. It’s a good idea to check out similar properties in your area and align your rent prices with them.
5. Advertise your property in multiple ways
Placing a “for rent” sign in front of the property is a great way to let passersby know it’s available. But, when it comes to finding renters, it may not capture everyone who’s looking for a home in the area. The truth is most renters start their search online. Advertising a rental online using these channels will broaden your reach:
- Use your website: If you own several rental properties, set up a website to advertise the available units. Just update it as soon as you know one of your properties will become vacant.
- Post on social media: Share your rental listing on Facebook, Instagram and Twitter, and ask family and friends to share it, too. You can also post ads for the property in local Facebook groups.
- Create a listing on Rent.com: Whether you have a rental house, condo or apartment community, posting the listing on Rent.com allows you to reach about 10 million potential renters. The site also enables you to accept applications, screen tenants and take rent payments online.
Other advertising options for how to find renters include placing an ad in a local newspaper or distributing flyers around the neighborhood, such as local grocery stores or libraries.
6. Show the property
When you get calls from your rental ad, be sure to respond promptly and schedule individual showings with anyone interested in seeing the home. Tours allow potential tenants to see the unit in person, ask questions and decide if the place meets their needs.
Showings are also a great time to get a sense of whether the person will be a responsible tenant. Be prepared to openly discuss the rent price (including whether you’ll negotiate the rate), the amount of the security deposits and fees, policies such as whether you allow pets and how you handle repairs and the application and screening process.
Along with individual showings, schedule a couple of open houses that are open to anyone. Open houses will attract a broad group of prospective tenants who can drop by and scope out the property on their own. If they’re interested, they can ask questions about applying to rent the unit.
7. Sell yourself as much as the rental
Renters are, of course, looking for a nice place to call home. But they also want to rent from someone who’s respectful and professional. When you meet potential tenants for the first time, it’s your time to shine. Respond to calls or emails promptly, be on time for meetings, behave in a friendly and professional manner and be upfront about the property, rent and the process for screening tenants.
The goal should be to establish a long-term relationship with renters. Following through on any promises and treating renters with respect is a chance to solidify that bond. Once they move in, always respond timely to requests, make repairs when needed, listen to their concerns and generally keep the lines of communication open. Keeping renters happy will likely encourage them to live in the home longer.
8. Take rental applications
Create a standard rental application with the same questions and requirements to use with all potential renters. A standard application ensures you’re treating all applicants equally and complying with state, local and federal housing laws. Applications typically ask for someone’s contact details, proof of income, emergency contact, references, rental history, pet information and a photo ID. Charging an application fee of $20 to $50 covers the cost of processing the applications and conducting background checks.
If more than one person plans to move into the rental, consider having everyone apply separately, especially if they’ll be paying rent separately. One renter can apply and still have a roommate, however. They just need to specify that in their application and the situation must comply with rental property laws.
Once you receive an application, date it and note the time it was received. Then, do a quick review, just to make sure the applicant answered all of the questions and provided the required information. If anything is missing, ask them to submit those items. When you get multiple applications for the same property, create a spreadsheet to help you track each one and decide which renter is most qualified.
9. Screen potential tenants
The application provides all the information you need to screen tenants. There are several types of screenings to conduct to verify that an applicant is qualified to rent the property — just make sure you use the same screening process with everyone:
Check references
Contact previous landlords, employers and personal references to find out about an applicant’s rental history, financial situation and general stability. Ask how the reference knows the applicant (in case they misrepresent friends as employers, for example) and when verifying income, keep in mind some companies have policies against providing details about employees. Ask yes or no questions, like “[Applicant’s name] said she earns $5,000 a month working there. Is that true?”
Do a credit check
Running a credit report will help verify an applicant’s financial history, including whether they pay bills on time, their credit score and past evictions or bankruptcies. Avoid basing everything on credit score alone, however, as people just establishing their credit might have a lower score or someone may have encountered a hefty medical bill.
Run a background check
Criminal conviction information is public and available at local courthouses. You usually just need a person’s birth date and full name to run a background check. But double-check local renter laws to make sure they permit criminal background checks for tenants. For example, some states prohibit property owners from discriminating against tenants with certain types of convictions, but you’re allowed to check sex offender registries.
Review rental history
Try to talk to at least one of an applicant’s previous landlords to find out if they paid rent on time, why they moved, how they maintained the property, whether they caused damage and if they gave notice before moving.
10. Decide what makes a qualified tenant
Property owners can decide what makes a qualified tenant, as long the qualifications comply with federal, state or local housing laws and avoid discrimination. Set standards for qualifications that you apply to everyone. Here are some examples of what you might require:
- The renter’s income to be at least three times the monthly rent. Since most renters pay about 30 percent of their income in rent, this ensures they’ll have enough to cover rent each month.
- A “fair” credit score of at least 600. More importantly, check the individual’s bill payment history and verify employment.
- Impeccable references from past landlords, showing that the tenant hasn’t been evicted in the past.
- No past criminal felony convictions, if this is allowed based on your local tenant laws.
- A tenant may need a co-signer or guarantor if they don’t meet the requirements.
11. Prepare and sign the lease
Never rely on a verbal agreement with a renter. You need a lease that outlines your responsibilities and the tenant’s responsibilities while they’re living in the apartment. The lease should specify who’s responsible for which repairs and maintenance, when rent is due, how rent should be paid, pet policies, roommate policies, how lease renewals are handled and how much notice a renter should give before moving out. The lease protects you and the renter.
After you’ve reviewed applications, screened applicants and decided who meets the qualifications, go over the lease with the prospective tenant to make sure they understand everything. You can also negotiate portions of the lease, such as whether pets are allowed or if certain utilities will be included.
Once the lease is finalized and everyone agrees to its provisions, you and the tenant sign it. You’ll collect the security deposit and pet fees and decide on a move-in date. Be sure to give renters a copy of the signed lease and keep a copy in your records.
How to find renters
Learning how to find the best renters is a critical part of owning a rental property. Tenants that pay on time, communicate effectively and take care of the apartment or house are your best option, and there are several ways to find them. When you find top-notch tenants, you can build lasting relationships that ensure your property generates income and keeps vacancies to a minimum.
The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.
Source: rent.com