Getting To Know Your Prospective Tenants

The way to get a tenant to take care of the property and pay the rent on time is to rent to the right tenant straight from the beginning. This is the biggest problem area for most new landlords. How do you get the right tenants? Rest assured there is no guaranteed formula. There are, however, certain tips that will prove helpful.

Of course you will want to talk with the prospective tenants and form an opinion of them. (This is very important and is why it is always suggested that you do the renting of the property personally.) And the main factor that can help attract and rent to an upstanding tenant is getting somebody with a good track record.

The Credit Report

Today, you as a landlord should have no trouble in getting a written credit report on a prospective tenant. All that you really need to do is to contact one of the local credit agencies (listed in your phone book), explain what you want, and have them send you some of their forms. The cost is usually under $25 for a brief report.

When you find likely tenant candidates, have them fill out the form, being sure they give you permission to check their credit history. Then contact the credit-reporting agency with your request. Usually within a day you'll have a printout of their credit history. Check it over carefully.

Ideally you're looking for tenants with no bad credit. They pay all their bills on time and have credit with a wide variety of lenders from credit card companies to department stores to banks. Chances are, however, you won't find this kind of tenant all the time (or even very often). More likely the person who rents has spotty credit - some good, some bad.

Study the credit report. If the prospective tenants have a lot of "late paying" notes, chances are your rent won't be paid on time either. If they have some loan defaults or other failures to pay, you may not get your rent at all.

The credit report should be taken as an indication of how the prospective tenants view their credit. If they view it casually and don't really care, then you could end up with no rent. You want tenants who take their credit seriously and who regularly pay on time. One of the biggest mistakes is to "fall in love" with a tenant (not literally, but figuratively). The tenant seems ideal, until the credit report comes in. You look at the bad credit report and then choose to ignore it because you're so convinced the tenant is wonderful. Bad move. Ultimately it's a judgment call. However, if you decide not to give a bad credit report a lot of credence, why did you order the credit report in the first place? Give the tenant a chance to explain bad credit. Listen to the explanation. It may be perfectly logical and may not be the tenant's fault.

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