Throughout the rental industry, great tenants are worth their weight in gold. Whether it is paying on time, quickly reporting issues, or showing general respect for your property, these are the occupants you want to find and keep as a landlord. But as the rental housing market grows more and more competitive, keeping those great tenants is increasingly difficult. Join us as we take a look at tips for finding great tenants and ways to convince them to stay!
How to Attract Great Tenants for Your Rental Property
Keeping ideal tenants first starts with finding the right tenants for your rental property. That said, attracting the best fit starts with preparation on your part as the owner. Follow along with these tips below to ensure you are reaching your target renter.
- Narrow Down Your Target Market – Research what types of renters live in the area. Is it a college town, popular with young professionals, or more family-oriented? Once you know the kind of renters your property will attract, you can better cater to their needs.
- Market Smart – Advertising does not have to be elaborate or expensive. Target your marketing towards where your ideal tenants will be looking for it. For example, in neighborhoods with high student ratios, post your ad to local college boards. Whenever possible, use professional photos to showcase your property and always list online with sites such as Zillow and Craigslist.
- Highlight Area Amenities – Your rental property is important, but so is the location. Local parks, restaurants, cultural attractions, walkability scores (if in a city), and even gyms can all factor into a tenant’s decision. As we mentioned, the market is competitive; whatever you can do to set your property apart in your marketing description will help to get noticed.
- Know Your Competition – Nothing matters more in determining rental rates than the local market. If you are too high, it will only drive away potential occupants. So, research local properties currently on the market as well as those that have rented recently. Be sure your listing is in line with what is available to potential renters.
- Promote Convenience – We are living in a technological age. Renters today expect the ability to pay rent easily online, and any added conveniences you can offer is a plus. Many sites like Appfolio are available to landlords to streamline processes like rent collection and even maintenance reporting for low monthly fees. Worth considering for both their convenience and yours!
Great Tenants Begins with Great Screening
Before you can focus on keeping great tenants, you need to find them. Screening applications is not a process to overlook or rush. This is your first and best defense against a tenant who won’t pay or will not take care of your investment property. As a landlord, you should create rigid guidelines for qualification and stick to them, being sure to hold every tenant to the same standard. Consider these factors below:
- Income and Employment Verification – Tenants need to show an ability to afford the rental rate along with other financial responsibilities they may have. Generally, a tenant that makes three times the monthly rent or greater has sufficient income to afford the rent. In addition to income, verify valid employment through current pay stubs, W2, or directly speaking to the tenant’s employer.
- Credit Worthiness – Credit reports offer a broad picture of the tenant’s financial situation. Do they have a history of late payments? Accounts in collections? Fraudulent behavior? The tenant’s credit report, in conjunction with other qualification guidelines, can help landlords determine if they are the right candidate or not.
- Rental History – Do not merely take a tenant at their word that they have a perfect rental history. So, screen applicants for any past rent court filings or evictions on their record. If they have a history of other rental troubles, they are considered high-risk, so landlords beware.
- Criminal Background – Checking an applicant’s criminal record is not only for the safety of yourself and your property but also for your neighbors. Screen for any activity within, at minimum, the last seven years. If the tenant has a history of violence or drug activity, they may not be a good fit for your rental.
- References – Require any applicant to provide references. Ideally, these would consist of previous landlords, employers, or trusted sources that can shed light on the tenant’s character. To get the most out of interactions with references, prepare a list of open-ended questions ahead.
How to Recognize Warning Signs in Tenant Screening Reports
Once you have screening reports and applications in hand, what do you need to look out for? There are some crucial factors to consider that help owners narrow down the field to the best possible tenant. Follow along with these tips below:
- Steer Clear of Late Payers – When you see a pattern of late payments on rent or other bills, it likely will not be any different in your home. So, stick with applicants who have a solid payment history.
- History Can Repeat Itself with Prior Evictions – When an applicant has a history of eviction, especially more than one, this is a red flag. Although the tenant may try to downplay the circumstances, this is a significant risk for landlords, and it is better to avoid it.
- The Vagabond – When someone moves around a lot, for whatever reason, this could spell trouble. The last thing a landlord wants is an unexpected vacancy or a lease break. Take rental history seriously in conjunction with all other factors when deciding on an applicant.
- Beware of Criminal History – If an applicant has a record that includes any felony convictions, this is grounds for denial. Examples of felony charges including but not limited to; domestic violence, assault and battery, drug distribution, and sexual assault.
- Low Credit Score – Throughout the industry, a minimum score of 600 is widely accepted. However, the score is not the only element to evaluate. Closely review payment history and any large debts as part of your decision-making process.
Tips for Keeping Good Tenants in Your Rental
Statistics from the National Center for Housing Management show that 54% of apartment turnover to new occupants each year. Enticing an excellent tenant to stay is essential for landlords. Not only does it cut down on the costly turnover process, but a replacement for that great tenant is also hard to find. To help improve your odds of keeping good tenants, follow these tips below.
- Prioritize Maintenance Requests
- Get a Jump on Lease Renewals
- Advocate for a Longer Lease Term
- Treat Tenants Equally
- Anticipate Wants and Needs
- Reward Good Behavior
Prioritize Maintenance Requests
Maintenance, or lack thereof, can be a significant contributing factor to tenants looking for a new home. Therefore, respond to and handle tenant maintenance concerns accordingly and remember to communicate throughout the process. Additionally, routine and proactive maintenance can go a long way in protecting a landlord’s bottom line and keeping tenants satisfied.
Get a Jump on Lease Renewals
Tenants appreciate added notice when they need to renew and especially if the rent is increasing. This is also beneficial for landlords, in the unfortunate event they do vacate, getting them thinking about their decision sooner rather than later can help you prepare for a vacancy. Additionally, if you find they are unhappy for any reason, you may have an opportunity to change their mind and convince them to stay by resolving the issues.
Advocate for a Longer Lease Term
Offering a longer or more ideal lease term for a reduced rate can help keep tenants in place. For example, if they currently renew each year, offer an 18 or 24-month term at a slight discount. Weighing the small amount you would lose over trying to fill a vacancy might be well worth it.
Treat Tenants Equally
Not only is this just good business practice, but it is also the law. Landlords must familiarize themselves with federal, state, and local Fair Housing Laws to avoid tenant disputes or accusations of discrimination. However, responding to everyone with the same care and concern is what you need to do anyway to maintain a great professional relationship with your tenants.
Anticipate Wants and Needs
Understanding what your ideal tenants are looking for will help in keeping them in place. As we mentioned, rental market competition is fierce, and owners need to do what they can to set their property apart. Thoughtful upgrades like hardwood flooring, stainless appliances, added storage solutions, or central air might cost money outright but will pay off in the long run by attracting a wider group of prospects. So, get to know the neighborhood and scope out the competition to ensure your property is up to snuff.
Reward Good Behavior
A small thank you or lease incentive can go a long way with tenant relations. When it comes time to renew, consider offering a discount as an incentive to renew, which also serves as a thank you for being a great tenant. For example, you could offer $100 off the first renewal month as a bonus. Another option is to reach out to local businesses and negotiate special offers. Is the local gym willing to offer a discount or free sign up fee? How about a 10% off pizza delivery?
So, as the rental market continues to grow and thrive, use these tips above to find and keep a great tenant in your rental. Still unsure where to start? Are you in need of professional marketing, leasing, screening, and maintenance services? Bay Property Management Group can help! Our experienced staff can help find the best option for your rental, and we offer a 6 Month Tenant Warranty. That’s right; if we place a tenant who gets evicted within the first 6 months, we will lease the property for free! Give us a call today to find out how an investment in professional property management services may be the best investment you ever make.