King Solomon’s ageless advice to combine prudence with wisdom makes sense for anyone making financial decisions today. And in the current hot rental market, the investor/landlord creating an income stream through rental properties is finding that a healthy dose of prudence applied to renting properties can head off costly problems later. That’s why landlords are becoming increasingly proactive — and choosy — about finding the ideal tenant for their properties.
Profile Your Ideal Tenant
Decide who your ideal tenant is. Write a short profile of that person or family – where do they work? Play? Go to school? Do they have pets? Consider income, lifestyle and social factors. This little exercise, however fanciful-seeming, helps you advertise in the right places and weed out the applicants that don’t fit what you’re looking for.
Make a Plan to Find That Tenant
Once it’s clear what kind of tenant would be best for the property, the next job is to let them know about the rental. Here too, a little imagination helps. Where would people fitting the “ideal tenant” description go to search for a home? If they’re parents, advertising in places close to schools might help. Students? Perhaps a college newspaper or a social site would reach them.
Scope Out Your Competition
Real estate is competitive, and any landlord/investor is in the running with others for those ideal tenants too. So it may be worthwhile to take a look at what they’re offering. Follow up on local ads or visit a website. If possible, have a look at the properties they’re offering, along with any other incentives to rent such as early rent payment rewards, a free first month, or high speed internet.
In the world of social media and a vast array of marketplace sites as well as the old standbys of flyers and local newspapers, there are almost too many options for advertising a rental. That’s where the plan to find those good tenants comes in.
But there’s more to advertising a property than that. Target the property description to fit the imagined tenant’s interests – would they be attracted by a workout club two blocks away? The fact that the house is only ten minutes from downtown or close to several schools? And what aspects of the property would be important to them – energy efficient appliances? Good security? Add those things to the list.
Showcase the Property –and Yourself.
An often forgotten aspect of recruiting good tenants is showing the property in the best light possible. That means it should be clean and ready for move in with all repairs done. What’s more, according to landlord-tenant experts, the landlord’s appearance is an important part of the picture too. Showing up in a T-shirt and shorts to meet potential tenants sends one message; appearing well dressed and professional sends another.
It may not always be possible to find the completely ideal resident for an income property and surprises can happen after the most careful screening. But within the limits of fair housing laws, there’s much an investor can do to make sure the right applicants find the rental – and start building wealth as Jason Hartman recommends. (Top image: Flickr/The Consumerist)
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