Many property owners will not even consider renting their home because they have heard the horror stories of bad tenants destroying rental property. This common fear is one that should be put to rest.
I have been working in the leasing and property management industry since 2002 and have dealt with many landlords and renters in that time. I have witnessed some awful experiences but more frequently I have experienced some incredible ones. By incredible I mean tenants that care about a home as much or more than the property owner. A tenant that has respect for their living conditions and environment as well as the property owner.
These “incredible” experiences are most often seen in situations where the home owner actually rented their house out and never expected the property to be a rental. The reason this happens is because these homes are typically in nicer neighborhoods where their are less rental properties available. People moving into these place are, most often, trying to move into a certain school district or area. These renters are not typical tenants and may have never lived in a rental property.
Proper tenant screening, an ample deposit, and good tenant relations can make this a delightful experience.
1) Tenant Screening- When choosing a renter(s), landlords should always have each applicant fill out a full residential lease application. This application will give the permission and ability to run a full credit, criminal and background check on the potential renter. Here one will be able to contact previous landlords, employers, verify bank information and see full credit and criminal reports (www.cbcinnovis.com offers a great service) It should be a pretty straight forward decision to accept or decline each tenant once the homework is done and information is received. Things to avoid would be felony charges, bad credit history (although given the current economical environment exceptions shall be made), previous evictions or past due balances to previous rental properties. It is also good to talk with previous landlords if these are available. Asking questions like “would you rent to them again?” and “did they leave the property in good condition?” is a good start. Landlords should be cautious about the information you get from the applicants current landlord. These landlords could really want these tenants to move out and could talk highly of them to get them out of their own property. Any good property management company will perform ample tenant screening as part of their service.
2) Collect an ample security deposit- This is a very important and can be a good sign of quality tenants. Requiring a security deposit equal to one months rent is standard practice in the rental industry. Even if this amount seems outrageous good tenants should have no problem coming up with the money to ease landlord worries. Tenants that cannot come up with the money are typically tenants to avoid because this is usually a sign that they have no cash savings and an unsteady income stream. Depending on the property and market exceptions can and should be made here. A large security deposit will ensure that the tenants will take care of the property in hopes of getting the deposit back. This will also give some security and risk mitigation in the event that the property does have some damage. Taking plenty of before and after pictures of the property noting everything in case disagreements arise. If pets are occupying the property an additional pet deposit should be required. This pet deposit normally ranges anywhere from 300-1500 depending on the pet type, history and elements of the property that will make it more or less conducive to animals (i.e.-wood floors, carpet, fenced back yard etc). Many people have pets and allowing pets will make any property that much more marketable (especially in Austin, Texas!). I have had some very good experiences with pets but it is important to be cautious.
3) Good tenant relations- This is a very important element of the rental process that is often overlooked. Good relationships between tenants and landlord is a necessity in order to minimize risk of damage. Knowing the tenant on a personal level and being attentive to their needs (within reason) will ensure a successful rental experience. Taking care of necessary maintenance issues and setting an example that the landlord cares about the property and tenant will likely produce a tenant that returns the favor. Not correcting issues and requests sends a message of “Landlord does not care about tenant concerns and only cares about maximizing income on the property”. This will likely create a hostile situation in which the tenant will lose respect for the landlord and the property. Many landlords want to constantly visit the property and check on the property but I do not recommend this. Certain situations and tenant/landlord relationships will permit but invading ones privacy is not a pleasant thing. I recommend holding announced and arranged property inspections every 6 months. A little “trick of the trade” is to include a monthly house keeping service as part of the rent. This should be a company or person chosen by the landlord with the understanding that they will report back to the landlord, any issues or concerns they see. This also works well because when a tenant’s home is cleaned by someone else they will likely work to keep it clean between scheduled services.
Its time to put the common fear to rest! Not all tenants will destroy rental homes and proper screening, ample deposit and good tenant relations can minimize this risk and create a pleasant and profitable rental experience.