A good tenant is very valuable. That means somebody who will stick around for a long time, who won’t violate their contract, and who will take care of the property. When looking to fill some vacancies in your property, you’re going to want to make sure you sign on only the best tenants.
Reliable Income
A solid, consistent income is the basis for a good tenant. Regardless of personality, a tenant who can pay rent is a tenant who is keeping their fundamental side of the contract. This means you will be able to pay off the property (and hopefully, make some modest profit as well). Ask applicants for their average monthly income. Ideally, it should be four times that of the rent, to ensure that they will likely be able to pay it. See if you can find a way (through voluntarily submitted bank statements, perhaps) to verify the truthfulness of that amount. A less-than-reliable income might be hard for some good people to have – so while it is important, take every applicant on a case-by-case basis.
Responsible Credit History
A good credit score generally means an individual who pays back their debt responsibly, in full, and on time. Thus, running credit checks help you find responsible tenants for your properties. A brief credit check shouldn’t change the credit score (although it may or may not cost a modest fee). Keep in mind that while a credit score can be helpful, it also does not mean everything. There are many inane and counterintuitive rules that determine a credit score – so be aware of the individual circumstance. It’s simply one piece of the puzzle, although it is a piece you need to be aware of.
Housing History
A given tenant’s history with their previous housing will provide insight into their character, and the priority that they place on paying rent. This can include (but is not limited to) whether or not they have ever failed to pay rent, if they’ve ever been evicted, if they’ve ever broken contract in any way, and other such breaches of conduct. Requiring tenants to put down information regarding previous landlords on their applications means that you can contact them and ask about specifics, if need be.
People need to be treated as individuals, not as statistics. Don’t rule people out immediately just because of one past eviction or a lower-than-average credit score. The key is to use these tools to build a three-dimensional understanding of who this person is and how they will approach your contract.
Check out this article on how to avoid renting to terrible tenants!