When I was getting started in real estate, I needed to get renters in my second rental fast so I could qualify for my third. The only problem? It was over the holidays, and I made my first big mistake in real estate... I didn't vet the renter well. Then, I rushed getting the lease signed so that I could get back to celebrating the holidays. Well, that didn't turn out so well. The renter didn't pay rent for the first month... and then the second month... and then the third... They pulled out every excuse in the book, and by the time I realized what was going on, it was too late. I had to take legal actions to evict them. The process took 4 months and cost over $10,000, yikes! This week I'll show you 7 easy steps to vet your renters, avoid all that headache, and hopefully save 10k! Let's dive in! --- First off, finding the right tenants is crucial to ensure steady rental income and protect yourself against risks like non payment or damages to your property. Now that I know better, here are 7 steps I follow religiously to screen tenants effectively: 1. Establish clear rental criteria: Start by defining the characteristics you're looking for in your ideal tenant. Consider factors like credit history, income, rental history, and references. 2. Conduct thorough background checks: Verify the information provided by potential tenants. Check their credit reports, employment history, and rental references. Look for any red flags that could indicate a risky tenant. 3. Verify income and employment: Request proof of income, such as pay stubs or tax returns, to ensure that tenants can afford the rent. Contact their employers to verify employment status and stability. I can't stress this enough, don't skip this step! 4. Check rental references: Contact previous landlords to inquire about the applicant's rental history, payment punctuality, and any past issues. This step can provide valuable insights into their reliability as tenants. 5. Run a criminal background check: Consider performing a criminal background check to ensure the safety and well-being of your property and other tenants. 6. Interview prospective tenants: Schedule a face-to-face or virtual interview with potential renters. Use this opportunity to get to know them better, ask relevant questions, and assess their communication and interpersonal skills. 7. Trust your instincts: Gut feelings can sometimes be valuable. If something feels off or raises concerns during the screening process, don't ignore it. It's better to be cautious and find a more suitable tenant. Then, finally, once I've decided on a renter, I give them a link to set up payments and pay the deposit and first months rent. If they don't complete this step, they don't move in. Period. Ps. I use Zillow Rental Manager to run this whole process. They make it simple to run background checks, employment verification, and onboard renters when If you follow these steps and are diligent in your screening process, you'll significantly reduce the risk of problematic renters, minimize potential headaches down the road, and save gobs of money! If you have any questions or are interested in launching and growing your portfolio, schedule some time with me below and let's chat. Until then, Happy investing!
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