The most important part of owning a rental property is finding good tenants. Bad tenants will almost always be expensive and miserable. At Progressive Property Management, we manage more than 1,000 properties, so we’re getting pretty good at the screening and leasing process. Today, we’re sharing what we do so you’ll know how to effectively lease your California rental property.
Marketing Your Rental Property to Attract Good Tenants
You want to be strategic and proactive with your marketing. Don’t just throw up a listing in one place or plant a yard sign in the front of the house and hope for the best. You want a large pool of tenants interested in your property. We use the Multiple Listing Service (MLS), which is effective, and there are other great sites like Zillow and even Craigslist. The important thing is that you get your listing out there in front of tenants who are looking for a new home.
Establish Consistent Rental Criteria
Once you have applicants, make sure you can provide written rental criteria. You have to show potential applicants what you’re looking for. There might be a minimum credit score. We require tenants to have a score that’s higher than 600. We also look for credible credit. We don’t want a lot of debt that might throw the tenants into bankruptcy once they’ve moved in.
Income is also important. Can the tenants afford your property? The industry standard is that tenants earn at least three times the monthly rent. So, if you’re asking $2,000, look for verified income that’s at least $6,000 per month from all the people who will be living there. Verify the income through pay stubs or tax returns. If they cannot afford the rent, you’ll run into problems later. If they stop paying, you’ll have to evict, and that can get expensive for owners.
Rental history is another part of screening and qualifications. You are allowed to see if the prospective tenant has any evictions in the last three years. Find out if they were late on the last property they rented, and if so, ask for an explanation. Check rental history.
Finally, ask them why they want to rent your home. You can’t discriminate based on fair housing laws, but you can find out why they’re leaving their current home and why they want to live in yours. It’s a legitimate and important question to ask.
Offer a Rent-Ready Rental Property
Make sure your property is rent-ready. Before a tenant takes possession, make sure the smoke detectors and carbon monoxide detectors are working. Document how the property looks with photos and videos. Once a tenant moves in, they’re entitled to normal wear and tear. You need a base that shows the condition of the property before and after the tenants lived there.
The longer a tenant lives at the property, the more wear and tear you can expect to see. But, if they’ve only been there for a year, you should expect the home to be in pretty good condition when they move out. Then, you’ll have 21 days to give the deposit back less any damages.
Make sure the home is ready for your tenants, and document its condition. And, check your tenants out thoroughly before they move in. Once they have possession, it’s hard to get them out.