Building wealth with rental property depends on good tenants – stable, long term renters who keep the monthly payments coming and don’t trash the property or create other problems for you and the neighborhood. While it’s easy to just put an ad online or in the paper, though, a landlord/investor ends up waiting passively for applications to show up. But actively recruiting those good tenants saves headaches and money. Here’s a rundown of useful strategies.
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? How about a college newspaper or a social site?
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. 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 them 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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