You have found a fantastic investment property, got it for a great price, done any work that needs to be done on it and it’s all ready to be rented out. What next? Finding great tenants for it!
Getting the wrong tenants for your property can be costly and time-consuming, so it’s much better to spend some time to find a good tenant from the start. Asking some simple questions can help you to screen the good tenants from the bad tenants quickly and easily. It is important that you ensure you ask the same questions to all prospective tenants so that you are not accused of discrimination.
Here are six questions we recommend you ask all prospective tenants…
1. What is your reason for moving?
It’s crucial that you ask this question as it can highlight any issues previous landlords have had with these tenants. Legitimate reasons for moving are things such as changing jobs, needing a bigger house or moving closer to family. Things that you need to be wary of is them having to move as they’ve been evicted, sued a former landlord or due to arguments with previous landlords or neighbours.
2. What is your monthly income?
This question will help you decide whether the prospective tenant can afford to live in your property, or whether you may have issues with them paying their rent down the line. As a rough guide, a tenants monthly income should be approximately two and a half times the monthly rent. It is also worth asking whether their current work is permanent, temporary or on a contract, and whether they are in a probation period with their job or not.
3. How long are you planning on renting the property for?
Whilst they probably won’t know exactly how long they will stay in your property, this can help you avoid tenants who will only stay in your properties for a few months. We recommend you begin with a 6 month or 12 month lease and then take it from there. If a tenant asks for less than a 6 month lease, it is probably best to find an alternative tenant. Finding tenants takes time, and you don’t want to be going through the whole process again a few months down the line when they decide to move out!
4. Do you have any pets? Do you smoke?
Many landlords put in place a no pet and/or no smoking policy. This is because it can help to keep the property in better condition. If they have pets and/or smoke and you do have this policy in place, this can help you rule out a prospective tenant quickly. If you allow pets, be sure to ask what type of pet/pets they have.
5. Can you provide references from your employer and/or former landlord?
If they say no to this question, more often than not they have something to hide. References from employers can help to verify income and stable employment. References from former landlords will give you an idea of any evictions or issues that have happened in the past. We recommend you obtain these references directly to prevent forgery by the tenant.
6. Do you have any questions for me?
You’ve asked them questions, so give them the opportunity to ask any questions they have about the property and tenancy. It’s always good to encourage good communication from the start!
We hope you have found this blog useful and these questions help you find great tenants for your rental properties.
If you are looking for further advice on property investment, take a look at the property mentoring services we provide at Nick Fox Property Mentoring here. We offer a range of mentoring packages to suit all needs.
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