Pew Research Center recently revealed that there are more renters in United States households now than since 1965. 65% of renters now are young adults.
If you wish to rent out one or more of the properties that you have, it means that you must find a tenant. Based on recent statistics, you are in good company, hoping to find the best tenant there is.
But what is a tenant and how does one find a tenant? All your questions will be answered shortly. Keep reading for the scoop!
What is a Tenant?
A person who will rent a unit of property from a landlord or the property owner for a set period determined by a lease is called a tenant. You can refer to anyone who occupies the unit as a tenant. Typically, there can be multiple tenants.
A tenant does not own the property. Even though they do not own the property, the law says they have rights as set by the agreement that is signed, which is called the “lease” agreement.
Is a Homeowner a Tenant?
A homeowner is a separate category of an occupant from a tenant. This is because homeowners can pay a mortgage and that mortgage loan will eventually lead to the homeowner owning the property outright.
A tenant will rent from a property owner of a larger property or from a homeowner. A homeowner could rent their property to a tenant if they want to. If a tenant was to rent out their unit, this would be a “sublease” agreement.
While a tenant has rights according to the law, they also have responsibilities to the property owner.
This includes paying rent on time and in full. They must maintain a clean unit and be quiet so as to not disturb the neighbors.
Best Tenant Tips
Renting a property to a tenant or tenants in any situation is a business decision. When you select the best tenant, it must be upon facts, not opinions. These are the things you must look for in a tenant.
- Steady income
- Positive credit
- Track record of paying on time
- Able to pay a security deposit upfront
- References from prior landlords
- Kind and respectful to neighbors
- No history of evictions
- No criminal record of dangerous behavior
Now you know how to find the best tenant. Next, let’s talk about the way to find a tenant.
Before you find a tenant, you must do a little research. Every jurisdiction will vary in laws that regulate how to select a tenant and how to advertise a property for rent. You want to be familiar with federal, state, and local laws for housing and tenancy.
You can find this information on this website for the U.S. Department of Housing and Urban Development.
Another good thing to do is make sure that your property is ready to rent before you search for a tenant. It will be easier to attract the best tenant when your property is in good condition.
Plus, when the property is in good shape, it sets the standards on what you expect from the tenant in terms of what kind of condition to keep the property in. It’s a way to let a tenant know you expect them to respect your property.
Next, you will want to know what a fair market price is to charge as rent. You want to maximize your profits, but you also do not want to go so high that no applicants will be interested.
Ready to Find a Tenant
Once you have done your homework on the laws, prepared the property for a good condition to rent, and determined a fair price for rent, you can now advertise your property.
Some people still like to print flyers and make signs, but it is best to place an ad online, as it is the industry standard. Advertising it online is also a low-cost method, too.
There are a lot of great websites to place your advertisement, including Craigslist and Trulia. You can include what is called a “virtual video tour.”
With the ad copy itself, mention both the positives and the negatives. If there are negatives, it is best to be upfront about them. Otherwise, you risk wasting a prospective applicant’s time, and your time, too, to show the property.
Another way to find a tenant is to ask family, friends, neighbors, and former tenants if they know a potential tenant that is looking to rent.
Qualifying a Tenant
If you receive a stack of applications, you will want to sift through them and find the ones that are most qualified. One way to reduce unqualified candidates is to clearly state your expectations to them upfront. This can mean expectations like no smoking, no pets, and the length of the lease agreement.
When someone is interested in being a tenant for your property, they will initially call or email you. This is a time you can screen them. Here are the details you should gather with your first contact:
- Names of the people who will occupy the property
- Contact information for all occupants
- Date for occupancy
- Smoker status
- Number of pets
- Reason for moving
This helps you to separate applicants you may not find to be a good fit. After you compile a short list of candidates, you can have them complete an application. You can now conduct a tenant screening.
Comprehensive Tenant Screening
Conducting a thorough screening is vital to protecting you and your property. This is how you can ensure you find a good tenant.
Running a Google search for someone’s name is not enough. Checking their social profiles to determine the applicant’s behavior is also not enough.
It is important that you check these three things:
- Credit history
- Criminal history
- Eviction history
This is how to get a well-rounded view of a potential tenant. Besides this, it is a good practice for a landlord to conduct a reference check with previous landlords. You can ask prior landlords if there were any noise complaints and if the tenant left the property in good condition.
Find a Good Tenant
Now that you have the answer to what is a tenant and how to find a good one, you are in good shape to rent your property. Just remember to do some research, tidy up the property, and run a thorough background check.
For more brilliant advice to help you navigate life’s business transactions, we are here to see you through it. Keep looking at our articles for more eye-openers that will make you even more business savvy than you already are.