Attracting high-quality tenants is critical if you’re a serious property investor. Without good renters, a property runs the risk of getting damaged and failing to generate rent, among other undesirable outcomes.
Below are some tips for how you can attract good tenants. You’ll still have to screen everyone, but you should have an easier time if you can locate promising renters from the start.
1. Work with a property manager
Hiring a property manager is one of the best moves you can make to support your rentals. It’s also probably the most effective way to locate ideal tenants and deter bad ones.
Property management firms know how to compose ads that will attract well-qualified renters. For example, they’ll make particular qualifications explicit so unsuitable prospects are unlikely even to apply.
When an ad states applicants must have a minimum credit score of 650, for example, people with poor credit will look for another plac
Getting ideal tenants into your properties entails more than just tossing out an ad that has lovely photos and hoping for the best. You can depend on the expertise a property management company can provide.
2. Set high qualifications
Once you start to receive applications, you’ll have to filter out unqualified individuals based on particular standards. For instance, it’s a smart idea to require a minimum credit score of 650, but you could raise it to 700.
It’s also in your interest to set high income requirements. Most investors ask their applicants to earn at least two times the rent, but some require three times that amount.
Whichever you select, you seek to ensure your tenants will have sufficient funds to pay their bills without skipping rent. Other vital qualifications include no record of recent bankruptcies and no evictions ever.
If someone was evicted two decades ago, they may not be a bad risk anymore. However, evictions indicate a tenant either doesn’t dependably pay the rent or fails to respect the rules.
You can hope you will have filtered out such applicants by crafting your ad appropriately. But you will never filter everyone out; there are bound to be at least a few applications from people who don’t meet your minimum standards.
3. Do not offer free rent
It might be tempting to offer free rent just to get your property occupied, but that could backfire. Advertising free rent is liable to attract lower-quality tenants from the get-go.
You don’t want the kind of tenants who look for deals. They’re the ones who typically won’t pay late fees and may try to negotiate lower rent in the middle of their lease.
When you offer a deal, you might end up with a professional tenant who will take advantage of the free rent and then stop paying. It could get much worse after that.
You really shouldn’t need to offer discounted rent to fill vacancies. If your property is in such bad shape that free or discounted rent makes it acceptable, you’re better off completing the repairs before seeking a tenant.
4. Don’t include utilities in the rent
Including utilities in the rent is common, but it’s typically not a good idea. Bad tenants often use an excessive amount of electricity, and your property could become a magnet for those types.
If you get stuck with tenants who consume too much energy, you’ll be stuck paying the bills until they move out. You’re not allowed to shut off the power, but you may design a lease amendment that requires the tenant to pay for their own utilities moving forward.
If you stop providing electricity that was formerly included in the rent, you’ll have to lower the rent to account for the loss of services. And if you fail to reduce the rent to compensate for the service loss, your tenant could file a lawsuit and win. It’s easier to separate utilities from the rent at the start of the tenancy.
5. Advertise what’s in the local area
Bad tenants aren’t usually picky about where they live. They’ll jump at the first unit they can afford.
But good tenants usually desire more than cheap rent. Many want to live within walking distance of shopping areas and entertainment; others seek a neighborhood with good schools and low crime rates.
Don’t neglect to list the local attractions. There are so many fun things to do in Katy, Texas, such as visit the MKT Railroad Museum, go on an adventure at Typhoon Texas, and bike through George Bush Park.
Advertising the perks will capture more attention from tenants who seek a quality environment. It’s not a guarantee, but it will help you draw applications from people who care about where they live.
Great tenants definitely exist
Although they might seem hard to find, great tenants do exist. You just have to know how and where to find them. We hope the tips in this article will help you do just that.