There is nothing worse than renting out an investment property to a bad tenant who just gives you grief and gets you into financial trouble by paying rent late or, worst case, not at all.
There are certain qualities landlords should look for in prospective tenants to ensure that the rental property is well-maintained and financially secure. You want to build a long-term, stable rental relationship to reduce the headache of having to find new tenants too often.
To achieve this, we asked RE/MAX to share six key tenant characteristics to look for:
A stable income: Be it a steady job or other reliable sources of income – a prospective tenant with a stable, monthly income is more likely to be able to consistently pay the rent on time. As a general rule of thumb, a prospective tenant’s income should be at least three times the monthly rent. This ensures that they will be able to comfortably pay their rent and meet all their other living expenses. A rental agent will also verify the tenant’s income to ensure that they have not falsified any information.
A good credit score: This shows that the person is financially responsible and is able to manage debts and payments. A rental agent will do credit score checks on all rental applicants.
A positive rental history: Check references from previous landlords. Good references tell you that an applicant is more likely to be a reliable and responsible tenant.
A history of prompt payments: Late or missed rent payments can have a significant knock-on effect on your cash flow and the property’s profitability, so it’s essential to choose tenants who have an established history of paying rent on time.
Pride of place: When interviewing tenants, try to find out a bit more about their personality to see whether they are more likely to be the type who will properly maintain the property, following any rules outlined in the lease agreement regarding maintenance and repairs, as well as when, and what issues to report to the landlord.
Good communication: This is key in preventing misunderstandings and ensures that any problems can be quickly and efficiently resolved.
