Sunday, May 6, 2007

Contemplating Self-Management of your Rentals? Pt. 2: Finding Tenants

As a self-managing landlord you have the responsibility of locating your own tenants, and the more credible they are, the better.  So, how do you go about locating such tenants?   

  1. You might want to start with referrals from your closest friends/relatives.  Sometimes they generate the best leads.  However, you also have to consider your ability to manage your property when you personally know the tenants.  If you have any reluctancy, you may find yourself more comfortable limiting your tenants to other sources.

  2. Advertise through the internet, newspaper, and/or via a sign at the property.

  3. Possibly have an Open House to draw prospective tenants in.

Once you've located possible tenants, you need to qualify them or determine their credibility.  Nothing's worse than placing tenants only to find out a month or 2 down the line that they were never capable of making the payment in the first place.  So now that you have some possible tenants, you need to know how to qualify their ability to pay monthly rent.

  1. Get the full name, social security number, and birthdate of the financially responsible tenants. 

  2. Previous residential address and payment history 

  3. Employment history including phone numbers for supervisors

  4. Enlist the services of a credit screening agency such as TransUnion, and make sure you have the prospect sign a disclosure allowing you to check their credit.

  5. Request credit references from the tenant's electricity, water, or phone service providers 

  6. Request banking references

  7. Request personal references

Helpful Resources:

Many people have found these books to be handy reference tools for managing their own properties:

Next time, I'll take a look at rents & deposits.