Those who have been landlords for a long time will all tell you that there is a lot of trial and error when finding your way. Renting out your property is a fantastic source of revenue and is always worth exploring. If you have decided to become a landlord yourself, this article will offer you several tips and tricks to make collecting rent as a landlord, easier.
Finding the Right Tenants
Collecting rent and keeping your property in great condition should be your two main priorities when you become a landlord. Rent money is your revenue and the right procedures should be in place to ensure rent is collected on time each month. Finding the right tenant is a huge part of this process. Learning quickly how to effectively vet out potential tenants is imperative to your success as a landlord in Colorado Springs.
How to screen potential tenants
The first step to vetting out the right people to rent your property is the application process. Start by having each potential resident complete an application, either online, or in hard copy. This is your opportunity to get most of your crucial questions answered. There is also vital information needed from the tenant so you can later run a background check on that individual. You can create an application yourself or follow an online templated application that contains many of the basic information required to take the next steps.
If you are renting out a property, you will most likely receive many applications. As a property management company in Colorado Springs, we see hundreds a week and ensure that this process is easy. In fact, you can leave it completely up to us to find the perfect tenant to occupy your property. Here are a few of the main things we require on rental applications:
- Current Income levels – Remember, as mentioned before, the collection of the monthly rent is your source of revenue as a landlord. Your tenant must have a source of income that will allow them to occupy your property. Also, it’s important to take note of your potential tenant’s employment habits. Do they frequently change jobs? Are they out of work a lot? Again, if their source of income is always changing, that increases the risks of renting to that individual.
- Financial Information (bank accounts, credit cards etc.) – The goal here is to figure out their income to spend ratio. Will they be able to make all their minimum monthly payments in in addition to the rent? Or will they run into financial trouble down the road that may lead to late or missed rent payments?
- References – If you are creating an application for yourself, we always encourage you to gain contact information for their previous landlords and their employer. The reference they give on this person will be vital in determining if they are able to maintain a good payment history with you while respecting your rental property. Cleaning costs and repair costs become very expensive after a tenant has abused a home. If they have done this in the past in their previous residence, there is a good chance they may damage your property also. The decision about whether you want that potential tenant in your home, is made easy with this information.
- Lifestyle Information – Inquiring about your potential tenant’s plans for their occupancy is very important. You may have specific preferences on whether you want a large family, frequent travelers, or pets in your property. So, you want to know things like how many people intend to occupy your property, as well as how many animals and their breeds. Have you decided if you will allow tenants with animals? If so, are there restrictions? It’s good practice to let anyone who is thinking about applying know what your stance is with pets. This will save everyone time and money in the end. If you decide to get a property management company in Colorado Springs, Galvan and Gardner is also a good choice because we will gather all of this information from you before we begin the application process and save it for when you may need to go through the leasing process again. This is a HUGE time-saver.
Background and Credit Checks
It is a given that you should peek at your tenant’s credit history and public/criminal background. This gives you valuable insight into the credibility of your tenants. Poor credit history and a pattern of missing payments is a huge red flag we always look for. We know you rely on rent collection for your revenue and it needs to be consistent and timely for your experience as a landlord to be hassle free. This is something that experienced property management companies like Galvan and Gardner are good at. We have many years spent screening multiple tenants every day in Colorado Springs. We know what the red flags are, and we know what a solid tenant looks like. Some of the other things we look for on credit and background reports are:
- Current Debt
- Credit History
- Criminal Records
- Public Records
Previous Landlord References
Follow through on your references, background, and credit checks is time consuming and requires a solid plan. It is imperative previous landlords are contacted and spoken to, and credit checks are thorough. Don’t make the mistake of leasing your property to discreditable tenants. Ask their previous landlord a few key questions to ensure all the bases are covered. Determining any outstanding debt owed and rent payment history is a good place to start. Was the tenant responsible in maintaining the property? If they left their previous landlord with a bunch of damage and monies owed, it’s a good indication they might do it again when they rent from you. Another good topic of discussion to have is about the overall impression of the tenant. Did this tenant ever disrupt the peace at their previous residence or cause any major issues with neighbors? One big, important question we ask previous landlords when screening your tenants is, “Would you rent to this tenant again?”
We’ve barely scratched the surface of all the responsibilities involved as a landlord. There is extensive time and energy spent in just the screening process alone. Knowing the legal procedures for tenant issues and maintaining the property with repairs and emergencies can also take up your valuable time. We always recommend utilizing a property management company to take the load from you. If you have multiple properties, or your properties are not conveniently located by one another, handing the reigns to the trusted experts, like those at Galvan and Gardner, is a smart move.