Attracting and keeping great tenants is paramount to long term success in real estate investing. Vacant property means lost revenue, so you want to keep tenants with hopefully long-term potential; having tenants in and out constantly will be stressful and time consuming for you. Your bank account will be thankful if mortgage repayments on the property are made by tenants and not you!
In most cases, managing your own property becomes a bit easier than managing your tenants. As careful as you may be in choosing tenants, you are still susceptible to getting bad ones. Paired with a solid lease agreement, following a few other guidelines will ensure that you have the best tenants in your property.
Guidelines for Rental Success with Tenants
1. Develop or Buy Property in an Ideal Location
You may have the best property in town, but is it located in a place where people want to live? People may be turned off if your property is located too far from schools, shopping centers, work, gas stations or public transport. The property must meet the lifestyle requirements of potential tenants.
Focus on areas that are equipped with social amenities, entertainment hubs, employment opportunities, education centers, retail centers, and a vibrant neighborhood. Even though not all of these are critical, many tenants will consider at least some of these factors in the surrounding area when deciding on a rental.
2. Maintain an Updated, Quality Home
The general rule of thumb is that the better a home is, the better the tenant(s) it will manage to attract. A well-maintained home with curb appeal is likely to attract a better tenant. The more updated the house and its amenities, the better. Other than attracting and retaining great tenants, this will also help you command a higher rent price.
3. Make a Killer First Impression
The first impression is always critical. You can turn off a potentially great tenant if the initial impression doesn’t meet their standards. If the potential tenant sees a well-maintained home, they will more than likely want to take care of the property as if it were their own. Not only does your property need to impress them, but you need to impress them with your professional manner and dress. If you are hiring an agent to handle your property, be sure they exude the professionalism you expect.
4. Screen Tenants
Screening a potential tenant may not seem to be a very friendly tactic but you can present yourself as a serious and motivated landlord. It’s important that you do this so you don’t waste your time with tenants who aren’t serious. During the screening process, the potential tenant may reveal some red flags that will give you the tip-off that they may not be the best fit for you and your property.
Scrutinize all of the tenant applications very carefully. Any inconsistencies in providing information should hint to the type of tenant they have been before. Through a background check, confirm whether the client has a criminal record and also call to confirm previous addresses. You may also consider checking their business and personal references to give you a valuable insight about their conduct.
5. Target Families
Families traditionally stay longer in one place than single tenants. Generally, families with school-age children will want to stay at the same school and avoid moving too often for the children’s sake at least. Families have more of a tendency to maintain a cared-for home because they take pride in making the home a clean and enjoyable place to live.
6. Take Care of Your Tenants
A good tenant is an asset that adds to your net worth. If you find a suitable and responsible tenant, you should strive to look after them and the property so they hopefully stay as long as possible. If they always pay their rent in on-time, then you should ensure that you promptly attend to any problems with the home. You should also consider locking-in the rent price so the tenants can plan their budgets accordingly. If you do want to raise the rent price, be prepared to explain why and give the tenants plenty of notice to decide if they are ok with this price or want to move out.
7. Market a Fair Rent Price
When deciding how much to charge tenants for rent, you should be very realistic. You should take into account current market prices, condition of the property and the location, among other factors. If you have taken all these factors into account and still have no renter possibilities, consider revising the price again. A slight difference between your rent price and what other similar, nearby properties are asking for may cost you a potential tenant. It’s better to lower the price a little and make a smaller profit than incur huge losses by leaving the property idle.
8. Hire a Property Manager
This applies if you are not the one managing your property. Before you decide to hire a property manager, check their reputation from reviews and do online research. Since they are representing you, they should have your best interests in dealing with your tenants. Asking friends, acquaintances and family members can help you find a good property manager.
9. Be Real Estate Market Savvy
As a good leasing agent, you should know where potential tenants are going to get information about the best properties in an area. They may be using newspapers, trade publications, websites, brokers, local periodicals, among other resources. Once you discover what mediums are being used the most by potential tenants, you can invest in advertising your services there.
10. Develop and Maintain a Real Estate Network
Securing and keeping exceptional tenants needs more than just advertising; you need a network for the real estate industry. Advertising will attract some potential clients, but referrals from other clients are typically going to be your best source of finding clients. If you treat your tenants professionally and respectfully, then they are likely to refer others to you. You can develop this network in part by your online activity, especially with blogs, fan pages, and other social media networking.
Real estate, like any other industry, has its ups and downs. Investing in real estate is a tough industry but has a multitude of opportunities and options for you to become a landlord, flip properties for profit, or even invest in your own home. However, finding and keeping great tenants typically presents the greatest challenge. Follow these steps to help attract and maintain ideal tenants in your properties for financial stability and stress-free business.