Finding quality tenants takes more than placing an ad and waiting for a response. While it is possible to find good tenants this way, you need to be very careful in your vetting process. If you are doing the screening yourself, don’t skip the references and do a background check. Without careful screening, your dream tenant might turn out to be a nightmare you never expected. Ask around, almost every landlord has one of those stories.
The Tenant Screening Process
One of the big advantages of using a property management company is the tenant screening process. Your property manager knows what to look for in a tenant and easily identifies potential red flags. When you meet the tenant, does your gut warn you off? If so, listen to it. However, sometimes nice people can become problem tenants.
One of your first actions is to get references and a background check. This may not turn up all problems, but it will help you avoid tenants that have a bad history with other landlords. In addition, look for other indicators of problems. Here are a few warning signs to look for:
- Past evictions— Renters with past evictions are always a poor risk, no matter what the reason was behind the eviction. Remove them from consideration immediately.
- A spotty work history— Changing jobs often or going for periods without a job could mean that they will have trouble paying rent on time. Look for renters with a stable job history.
- A criminal background—While a misdemeanor may be overlooked, depending on the offense, violent offenses should never be overlooked.
- Many pets or children—Pets and children are hard on your property and likely to do damage. Well behaved pets and children may not be a problem but consider how many you are willing to allow. At the very least, get an additional damage deposit when more than two pets or children are present.
Covering the Legalities
A good property management company will be able to help you with the legalities of the lease agreement. Because they handle many properties, they know how to write a good lease agreement and how to enforce it. The lease agreement is legally binding on you and the tenant, so make sure it protects you and sets forth the rights and obligations of you and your tenant.
Collect the security deposit, rent, and pet deposits when the lease is signed. If the tenant does not have the deposits and rent prior to signing the lease, this can be a red flag. These deposits are for your protection, don’t defer them.
Collecting the rent can be your favorite activity as a landlord or your least favorite, depending on your disposition and your tenants. For most landlords, it is a chore that keeps you anchored to your property. You don’t actually have to knock on doors anymore, technology makes it much easier. These methods work with most tenants:
- Collect rent online through a variety of payment processors
- Set up a drop off location
- Collect rent by mail
- Collect rent in person
- Have a property manager collect the rent
If you have problems with a tenant, or the rent is late, you will still need to give them a call or knock on the door. Realistically, these tenants should not have made it through your screening process. If it happens more than once, consider talking to a property manager.
A good tenant retention rate boosts your profit and helps your life go smoothly. The key to tenant retention is knowing your tenants and meeting their needs. You know that a young couple expecting their first child will soon be looking for a second bedroom. Show them what you have available in a two-bedroom apartment that may be coming available soon. Make desired upgrades for good tenants. Getting to know them allows you to meet their needs and keep good tenants for the long-term.
How GNP Realty Can Help
GNP’s property management team is experienced in Chicago property management. We handle both residential and commercial properties and are recognized as an Accredited Management Organization. Give us a call today to find out more about how we can help you manage and enhance the value of your real estate portfolio in today’s changing economic environment.