Recruiting: Ask around to find potential tenants looking for a rental or advertise your property online to find them. Two proven ways to find good tenants is through tenant referrals or a reputable management service, which can advertise your property, efficiently screen applicants and refer people to you for a fee.
1. Location. Be sure the property is in a location where rental demand is high (e.g., near public transportation, employment centers, etc.). Check vacancy rates and how long properties stay on the rental market.2. Property. Buy the type of property that is most desired by renters. In some areas, condos, townhouses or multi-family units may be easier to rent than single-family homes. In other areas, the reverse may be true.
3. Condition. Choose a property in good shape and easy to maintain. Excessive repair and maintenance expenses can seriously impact the profitability of your investment.
4. Demand. Find out what is predicted for the area’s rental market in years to come. Learn what plans are underway to change the neighborhood (e.g., road construction, industrial development, etc.) that might affect the value of or demand for your investment.
Setting Standards: Decide what your rental criteria are—then make sure you advertise the property accurately. Determine the following:
- Rental price and rental period.
- Minimum income requirements.
- Security deposits for last month’s rent, damages, pets, etc.
- Who pays which utilities.
- Restrictions on pets, smoking and/or maximum number of occupants or cars.
- Responsibilities for maintenance, repairs, yard upkeep and pest control.
- Satisfactory personal and former landlord recommendations.
Applications And Screening: Make sure your application form asks for all the information you need. Ask applicants to show their legal identification and verify the information they’ve provided to you. Remember, although you do have the right to choose who lives in your property, the Fair Housing Act prohibits discrimination based on the applicant’s race or color, national origin, religion, sex, familial status, and handicap or disability. In ads: Describe the property, not the people.