Saturday, February 8, 2014

The three keys to finding great tenants - By Amy Beth Brochu-Krikken

Perhaps you did not plan on becoming a landlord, but your family grew, and the house you outgrew was underwater (you owed more money on it, than it was worth at the time). So it made sense to rent out your house. Maybe you are an investor and you bought another property to add to your portfolio. However you became a landlord, you have one pressing need in common: The need to find quality tenants.
So how do you find quality tenants?

Before we get to the three keys to finding great tenants, you must get to know the Fair Housing Laws (in addition to other laws relating to landlord obligations). You cannot discriminate on the basis of race, religion, national origin, gender, age, family status or disability. However, your decision can absolutely be based on any information you find in regard to a criminal record or credit history.

First and foremost, you ask the prospective tenants to fill out a rental application form. This document gives personal information about the applicant and any co-applicants. The information includes the names of all the people who will be living in the home, as well as any animals they own. Knowing information about pets and other animals will help prevent surprises with property damage, insurance coverage or a homeowner’s association.

As part of the rental application you should ask for permission to call their most current landlord. This five minute conversation can tell you a lot about the individuals as tenants. There are certain things that the former landlord may not wish to say, for fear of any legal backlash, so do not put them in a predicament. Simple, to the point, factual questions will offer you the information that you need. Did they pay their rent on time? Would you rent to them again?

I highly recommend having a background and credit check completed on the potential tenants. It will cost you some money, but consider it a safeguard that could save you money and headaches. A few dollars can spare you from having to find out the hard way that your tenants have horrible credit and are unable to fulfill the terms of the lease.

I have saved the best for last. A competent landlord always insists on a lease, even if it is an abbreviated (short-term) lease. Perhaps you have a seasonal property and only rent for nine months out of the year, but engaging tenants in this legally binding contract is a smart move. It affords you and your tenants a clear understanding in writing of what the expectations are.

There are several online resources that offer sample forms, leases, etc. Find a company that you trust to perform the background and criminal records check. You can easily find what you are looking for by conducting an online search, or better yet, talk to other landlords and find out which website or service they use. 

Becoming a great landlord is not rocket science. Follow the law, complete your research on potential tenants, and once they are calling your house “home”, treat them with the same respect that you would wish to receive.

Amy Beth Brochu-Krikken is working toward her Real Estate License, and will hit the ground running this spring. Amy is a mom of three elementary school aged boys, and lives with her husband in Windham. They own two investment properties, and pride themselves on a history of happy tenants.

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