Without a doubt, the purpose of any investment in “income properties” is to generate monthly income on a regular basis. However, many investors, very concerned about the “numbers”, neglect one of the most important pillars to achieve that goal, which is the proper selection of their tenant. And, that is why many of them have had to face not only late rent payments, but also damage to their properties.
Here are some tips for choosing the best tenants for your property.
Prospects who have a verifiable income and a good credit history .
It is very important to obtain from the applicant proper proof of monthly income and their financial capacity to timely pay the rent. On the other hand, avoid problems and rule out applicants who have a low credit score; Low credit is already a condition that does not inspire enough confidence, it reflects a history of default on bills and other payments.
Check applicants' police records.
You can do this verification by reviewing the public records found in the Courts. Also, through the driver’s license you can find out if the person has been involved in any criminal activity. You can also request their police report directly from the applicant.
Ask for references from the two previous landlords .
It is advisable to ask the applicant for the contact information of his two previous landlords to ask them, among other things, if he was compliant in paying rent and if his behavior as a tenant and neighbor was respectful.
Ask the applicant the reason they are moving from their current residence.
Talking about this, in many cases, is a good strategy to find out if you have been evicted or if, on the contrary, you have a genuine reason to move.
Check their employment history.
Frequent job changes are not a good indicator of job stability, which can affect timely payment of rent; hence the importance of verifying work history.
Respect your intuition.
If, despite all the documentation being satisfactory, you do not feel comfortable with the applicant’s behavior, it is better to rule him out now in your selection process.
Finally, remember to respect the Federal Fair Housing Act.
Under this law, it is illegal to refuse to sell, rent, or negotiate a rental based on race, color, religion, origin, national origin, sex, disability, and family status. Family status means that the application cannot be rejected based on the fact that a person under 18 years of age will live in the property or that the applicant or another person who will legally live in the home is a pregnant woman or that the tenant or tenants are in the process of adopting a child.
