You’ve been over the basics, right? Your vacant rental property has been inspected, repaired where necessary and cleaned in preparation for your new tenant. You’ve taken great pictures and videos of the property inside and out. You’ve even gone as far as taking pictures of the neighborhood, highlighting the popular microbrewery and trendy sushi place within walking distance. You’ve listed the property on all the applicable sites, and received inquiries from prospective tenants.
But your work isn’t done yet. Consider these areas when preparing for and welcoming new tenants to your rental properties:
New tenant screening
Screening potential tenants can be a sticky area. You definitely want to spend time and resources to find out who you will be renting to and avoid problem tenants who won’t pay the rent.
When the tenant contacts you about your rental, ask some questions right off the bat to determine how serious and motivated they may be. After all, this is a busy time for property managers and property managers. If the person is looking to move in six months, it is probably not the best idea to waste time showing your property to them when you have more immediate movers interested. On the other hand, people who need to move in today or next week may show a red flag as being poor planners. For those with an immediate need for a new residence, ask why they are moving. Look for answers like evictions or problems with property management companies or neighbors. If they were unable to get along there, they will probably bring those same issues to your property.
Ask for references, personal, former property managers and employers. The length of time the tenant has known their personal references can show stability, as well as the amount of time they’ve been at their current job. If they job hop every six months, you may want to find out why. When speaking with property managers, go back to a previously vacated residence. If the tenant was a bad one, they may well remember and be willing to give you the straight story about them.
Credit, background and criminal records
When you determine that a prospective tenant may be a good fit, get them to consent to a credit check, background and criminal record check. If they don’t consent, you should disqualify them immediately. It most likely means they have something to hide and you probably wouldn’t want to deal with them anyway.
On the credit check, look for a history of late payments or serious delinquencies such as past bankruptcies, maxed out credit cards and massive debt. This may indicate an inability to manage their finances. The same holds true for background checks. Look for red flags such as tenants who have been sued for nonpayment of child support or other serious financial problems. Criminal records are sticky matters. A problem that occurred many years ago, with no recurrence, can often be overlooked, but keep in mind the safety of your other tenants if you have a multi-family property, and your own safety.
Remember, the Federal Fair Housing Rules prohibit discrimination based on race or color, national origin, religion, sex, familial status or disability. There is a fine line between getting the information you need for your peace of mind and overstepping into too personal territory.
First month’s rent, security deposit and pet deposits
Once you’ve decided on a tenant, make sure to collect the first month’s rent, security deposit and pet deposits all in one lump sum. Moving expenses are a big burden on your new tenant, but not having all of the necessary funds up front, can be a sign that they are poorly organized or not financially responsible.
The lease agreement
When you meet with the tenant to accept their funds, you should also go over the lease agreement with the tenant, making sure they are clear on the rules. Things like not smoking in the unit, prohibition of adding roommates without prior consent and tenant screening should be highlighted here. Also, if you plan on requiring electronic payments, and your state allows this, now would be the time to let your tenant know.
Checklists for you and your new tenant
When the lease has been signed and the tenant has the keys in hand, have them walk through the property prior to move in with a checklist. There are loads of options online that you can just print off for convenience sake.
Move in welcome
Once you’ve found the one, as far as rental properties go anyway, providing a small gift such as a bouquet of flowers or a gift basket of some kind is a great idea. Possibly, a basket from the local discount store filled with things that people often need when they move into a new place. Maybe a couple of rolls of paper towels, toilet paper, bottles of water and if you’re feeling generous, maybe even a gift card to that restaurant on the corner. I promise you, your tenant will remember a gesture like that!