As a rental property investor good practice is to take the
time to qualify or even pre qualify your potential renters. First Start out with a very thorough
application. Rule of thumb is to go back
3-5 years on both employment and rental history. By going back 3-5 years, you
are able to see stability in a persons income and job, or if they then to be
“house hoppers” or “job jumpers”. Always
take the time to call references. Too
many landlords feel the rush to fill the vacancy rather than taking the time to
make sure the prospective residents is the right choice for the property.
As a landlord myself, if the prospective resident is local,
then I take the time to drive by their current living address several times to
see the outer appearance of the property condition, again in doing so I can see
how my property is going to be cared for.
Will there be trash everywhere? Are there 3 junk cars in the driveway on
blocks? Do their animals destruct my yard? Etc.
I also take the time to do a “pop in, I was just in the area
visit”. Though this can be uncomfortable
for some, I have personally used that approach as a finalization of the
application process and a way to deliver the news of yes; they are approved for
my property. If the prospect qualifies
financially, and to your terms, should you arrive at the “pop in inspection”,
and see something you don’t approve of or that their housekeeping conditions
aren’t the greatest, then you can just say you were in the area and thought you’d
pop in to let them know personally that the application is still in the
processing phases and they should know something within 24 hours.
You may set your rental guidelines to your specification as
far as income. If a prospect receives
Government or State rental assistance, you can not require their income to be
as sufficient as a private pay. A good
rent to income ration, and again another that I use personally is that a
household’s combined income must be 3.5 - 4 times the monthly rental
amount.
Every person over the age of 18 regardless of student, or
employment status, must fill out an application for any of my properties, due
to the fact that in signing the application, it allows me permission to do a
back ground check. Certain criminal
misdemeanors and most usually all violent type felonies are immediate grounds
for denial. I look at it like this, I
don’t want a person who is a drug dealer or engages in serious criminal
activity living in my homes. The
excessive traffic, and constant fighting, loud music etc, is not appealing to
other neighbors in the home, and will most always bring down your properties
“perceived” value.