Tips for Landlords: Finding Good Renters
If you’ve found employment in another state, or have already purchased a new home and can’t seem to sell your old one, you may consider renting it out. Renting is always an option for homeowners who, for whatever reason, cannot remain in their homes. Maybe you’re upside down on the mortgage and can’t sell. Maybe you have a deep emotional attachment to the house and can’t bear to let it go. The tricky part for you as a landlord is finding good renters to take care of your home in your absence.
Although apartments and real estate agents that market rental property require a credit check of all applicants, private landlords rarely do. The primary reason for this is that most of them haven’t the faintest idea of how to run a credit check. Many also hold the mistaken belief that, as a good “judge of character”, they’ll be able to pick the right renters when they meet them.
Don’t be lulled into a false sense of security just because someone dresses nicely and drives a nice car. Anyone who is genuinely interested in renting your home is going to automatically put his or her best face forward when they come to meet you. Your potential renters have no incentive whatsoever to be truthful with you about their debts and if they can actually afford your home if you have no incentive to find out otherwise.
Free Credit Reports
You are well within your rights to ask the individuals to pull a free copy of their government mandated credit report and bring it to you for you to review. If you hear the excuse “I’ve already pulled mine this year” counter with “You get three.”
Oh yes…three. You see, the law allows each person one free copy of his credit report from EACH CREDIT BUREAU. There are three credit bureaus. If you happen to be lucky enough to live in California or Georgia, you (and your potential renters) are entitled to two free copies of each (that’s 6) credit bureau’s report each year.
You also have the option of hiring a private company to look into the renter’s history. Remember to get your applicants’ signatures authorizing you to pull their credit records.
One or two bad debts should scare you away from what could be a good rental opportunity. Evaluate what the bad debts were for. Medical debts should always be overlooked, since these are often debts that individuals have no control over. Look at the public records section of your applicants’ reports. If there are any past evictions or judgments against your renters for rent that went unpaid in the past, that is a red flag and it probably isn’t in your best interest to rent to them.
Have an Airtight Lease Contract
Your lease contract can either protect you or come back to haunt you later. It is imperative that your lease contract contain everything that your renters are not permitted to do within your home (within legal reason). Even if you believe its common sense, you’d be surprised what some people attempt to get away with.
In the event that your renters violate a lease contract, you can begin legal proceedings to have them evicted from your home - and you can sue for damages. If certain prohibitions were not made in writing, however, you may have a tough time making your case in court.
- How to Write a Lease Agreement for a House
If you want to rent your home, you'll need to learn how to write a lease agreement for a house. Lease agreements can differ substantially depending on the type of property the lease refers to.
Call Previous Landlords
Your renters’ previous landlords are a wealth of information to you. Don’t pass up the chance to call them and discuss your potential renters. Even if the previous landlord doesn’t remember your renters, he or she probably has records of their stay kept on file. After reviewing the records, the landlord can tell you if the renters ever caused problems, failed to pay rent or violated the terms of the lease contract. If you’d like to see the records for yourself, you can request that the previous landlord fax them to you.
And don’t worry about your potential renters lying about where they used to live. Their old addresses will be reflected on their credit reports. A quick search of the addresses will turn up their location. If its an apartment complex - give the manager a call.
Overall, you can’t assume that renters are bad people simply because they are renting. Some people don’t plan on staying in town for long enough to purchase a home and settle in. Others don’t want the hassle of being homeowners. Treat your renters with respect, and they will return the favor to your property.