By The Apartment Source has over 30 years of experience of successfully uniting tenants with landlords. As a landlord, there is no single decision that will affect your business outcome more than your choice of tenant. While the right tenant can help you turn your building into the hassle-free income property you’re hoping it will become, placing the wrong tenant in your rental can cost thousands of dollars. Avoiding unpaid rent, legal fees, turn-over costs, and major property repairs are major goals for landlords.
How to find good tenants:
When it comes to finding a tenant who will pay rent on time, take good care of your property and keep peace with the neighbors in order to attract high-quality prospects. Most importantly, work with a great locator (ahem!) who will market your unit and show it in it’s best light! Once you’ve knocked those prerequisites out and have a set of interested applicants, it’s important to look into the details. Some factors matter more than others.
With this in mind, we have identified the 3 most important criteria when selecting a new tenant:
#1 Verifiable Income and Employment History
It goes without saying that adequate monthly income is one of the most important qualities in a prospective tenant. When it comes to determining how much income is enough, most landlords use the basic rule of thumb that the monthly rent should be no more than one third of a prospective tenant’s gross monthly income. Employment history is also a key factor. Most landlords like to see that a prospective tenant has been in their current job for six months or more. If your candidate has just moved into your area from out of town and has a new job, a history of steady employment becomes even more relevant.
#2 Rental History
Often overlooked, we believe a tenants rental history is one of the most important criteria. No matter how high their monthly income or how steady their employment is, if a prospective tenant has a rental history that includes chronic late payments, disruptive behavior, property damage, or evictions, you’d be wise to move on. The Apartment Source provides a rental verification for each candidate on your behalf so you have insight into their present or past tenancy.
#3 Credit History
When evaluating credit score, keep in mind that people can have lowered credit scores for a variety of reasons, some of which may not speak to their capacity to pay rent. If a prospective tenant is behind on student loans, for example, their credit will be adversely affected. That same individual may be current on all their regular credit card, car payments or utility bills, displaying the ability to pay regular obligations on time. Medical debt can be another misleading culprate. When evaluating a credit profile, the score itself gives some insight, but large amounts of credit card debt and/or extensive histories of late payments are the real red flags to watch out for.
Do you have questions about accepting a prospective tenant? Call or email one of our Landlord Services Experts 773.404.9900 or info@apartmentsourcechicago.com
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