Selecting a reliable, trustworthy tenant to occupy your investment property is one of the most important parts of owning investment real estate.
To select tenants who will treat your property with respect, consider the following suggestions:
- Keep your property in good condition. Make sure it is kept clean and tidy and that everything is up to date and in good working order.
- Set rent at a rate comparable to similar properties in the area. It’s good to have some room for negotiation, but asking too much may deter desirable applicants from even considering your property.
- Properly screen all applicants to determine their credentials. Do not rely on their word to validate their background and credit history.
- Remain patient as you screen potential renters. Since removing bad tenants is quite costly, remaining patient for a good tenant is worthwhile.
- If you are having problems renting a larger property, consider if it would be beneficial to adapt it into multiple smaller spaces.
- Consider any vehicle access needs a potential tenant may have. Find out if they need parking and if what you can offer is enough. Also ask about any large volume delivery needs that may require places to load or unload vehicles without disrupting traffic or other nearby businesses.
- Consider the impact on the current tenants or neighbors of renting to a potential tenant. Will the potential tenants cause a noise disturbance? Pollution? Conflict business with current tenants?
- When choosing between prospective tenants, keep in mind how long of a lease they are willing to sign. Long-term tenants save you the trouble and expense of having to find new renters, and they also give you a more consistent cash flow.
- When renting out your property, make all tenants sign a Tenancy or Lease Agreement. Outline who will pay for utilities, take care of snow removal, maintenance duties, lawn care and similar responsibilities.
- Include the insurance requirements of both parties, such as the landlord’s responsibility to insure the building and premises as well as the tenant’s responsibilities to insure all contents.
- If you have multiple units, it may help to hire a property manager who can conduct background checks, screen applicants and keep the property in solid working order. This will take some of the burden off you and will make them the point of contact once the property is rented.
For reference use only. Not intended to identify all hazards, or reflect all requirements of federal, state, or local law.
This information is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice. Should you have any questions or would like to discuss your risk exposure with your landlord insurance, please contact the insurance pros at ARCW Insurance. We are here to help.