For people who own a rental property, finding the right tenants is vital to ensuring a successful relationship and keeping costs down on an ongoing basis. Fortunately, there are a few rules of thumb for landlords to follow and ensure they are able to find tenants who will work out well for them.
First and foremost, it's vital for anyone with a rental property to make sure they are familiar with the Federal Fair Housing Act, and what rules it puts in place for how property owners can both advertise their properties and actually deal with potential tenants, according to The Balance Small Business. Broadly speaking, all potential tenants must be treated equally, but specifically landlords are not allowed to discriminate based upon race or color, national origin, religion, sex, family status, disability and so on. Moreover, many states have their own Fair Housing rules to which property owners must adhere as well.
What to look for
After those important formalities, owners are relatively free to determine who will be a good fit for their rental properties in a number of ways, the report said. For instance, they can – and should – run all prospective tenants' credit ratings to determine how likely they are to be able to keep up with payment, and can also verify their income to further ensure they'll be able to pay rent on time and in full each month.
In addition, many landlords may want to run background checks on their tenants to ensure they don't have a criminal history, but this can run into Fair Housing issues in some states, the report said. While it may be perfectly legal in one state to deny a tenant based on a conviction in their past, that might not be the case in one just over the border, so it's vital for owners to look into the requirements they face here as well.
Meanwhile, owners can also limit their tenant searches in other ways, such as by not allowing pets or smoking within their buildings, according to Rentulations. Similarly, it might also be wise to talk to potential tenants about references from former landlords or others who might be able to speak to how well they dealt with their rent payments and home upkeep previously. In speaking to those landlords or property managers, asking about basic information – such as whether rent payments were typically made on time and the shape in which the applicants left their previous apartments when they moved out – could be a great window into their habits.
Often, putting together a comprehensive rental application can answer a lot of these questions in advance, and screen out potentially problematic tenants before even reaching an interview stage, according to Money Crashers. If people are reluctant to fill out certain information on these forms or simply don't provide satisfactory answers, that can help to separate qualified applicants from others in short order.
The more property owners can do to get plenty of information before someone moves in, the better off they will be to avoid any potential hiccups that lead to difficulties – financial or otherwise – going forward.
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