How to Find the Right Tenant for Your Property

It’s not easy finding a good tenant who will pay their rent and take care of the property. In order to protect the home you are renting out, it’s important to take your time when finding a tenant. This way, your property will be well-maintained, reducing a lot of costs involved in repairs. There’s nothing worse than putting your trust in a tenant who winds up ripping you off and damaging your home.

So what can you do to find a good tenant for your property? We’ve got some tips:

Get a credit check

It is important check the financial status of the prospective tenants in order to make sure that they are financially responsible. Such a tenant will be able to pay the rent and security deposit because they have income coming in. You can verify this by requesting a look at their pay stubs, or you can call their employers to confirm their employment status. It is also good to look at the amount of debt they have by running a credit check. You can alter the amount of the security deposit based on their credit.

Carry out a criminal background check

You don’t want a tenant who is involved in criminal activities. By performing a criminal check, you will be able to find out if the tenant is involved in minor or major crimes. All you need is the name of the tenant and date of birth to get this information. Note that those with criminal records may not give you the right information, so ensure they provide you with valid ID for verification purposes. 

Have a look at their rental history 

To verify that you do not get a problematic tenant, talk to their former landlords. This will help you understand how they pay their rents, how they handle themselves in the property, their cleanliness level and whether they follow the rules set in the property. Also, if the prospective tenant is a first time renter, make sure you have a cosigner for the lease. 

Consider their lifestyle 

On the tenant application form, you should check the tenant addresses and employment history. Check to see whether they have a tendency to move from one job to the other or move from one property to the other. This can help you to know whether they are likely to be long term tenants. 

Bottom line

By considering the above factors, you will get good tenants who will rent your property for a long time and ensure that your property is maintained properly. You will also end up saving money and time involved in evictions, nonpayment of rent, and damages to your property. 

5 Options to Consider if You Can’t Find a Buyer

Selling a house can be difficult if there are too many houses in the market. If you have a home for sale, you probably already know how difficult it is to find a serious buyer in the existing real estate market scenario. Now, in case your search for a buyer is taking longer than you expected, here are a few options you can consider:

Rent the house 

Renting allows you to generate some income from a property that has been in the market for a while. Of course, you can't make a lot of money by renting, but this is definitely an option you can consider if you feel that finding a home buyer is taking longer than usual. What's more, if you place it on rent for long enough, the market conditions in your locality may improve. People who hold on to their property during a slump will be able to sell it for a higher price when the economy recovers.

Not every seller will want to rent his house. They suspect that the renter will not take proper care of the property. What's more, renting your house to the wrong person can invite a lot of trouble. Evicting a problem renter may take many months and cost a few thousand dollars.

Lease the house

Leasing your home is another option you can consider. When you lease your house, you will receive an extra fee besides the standard monthly rent. Of course you will have to sell the house to the renter at a later time in the future for a pre-determined price. Now, in case the renter decides not to buy the house later, you can keep both the rent and the extra fee.

Rent the house for short periods

If your house is in the vicinity of a tourist spot, you can consider renting it for short periods. Some companies also rent homes to provide accommodation to their non-permanent employees. In popular tourist areas, you can find brokers specializing in short-term rentals.

Sell the house to a realtor 

Some big realtors buy homes and later sell them for a profit. Since they have huge cash reserves, they will have no trouble holding on to the property until they find a good buyer. However, you can't expect these buyers to offer a good price. You may consider this option only if you are desperate to sell or are willing to accept a lower price.

Short sale

This is the least attractive of the five options we discussed here. Lenders want to avoid foreclosures at any cost. So if you are unable to pay off your home loan, the lender might even consider selling your home for a price less than the actual value of your loan. This allows the bank to get a bad loan off their books. They also save the expenses involved in the foreclosure process.

The bottom line

Depending on the market conditions, finding the right buyer may take a year or more. None of the options discussed in this article are ideal; nonetheless they allow you to generate some income while you are still holding on to your property.

Remember, you can always rely on a free home valuation report from Neighborhood IQ to help you in the selling process. Also, the Home Loan Advisor can analyze your property, current market conditions, local market comps, and other variables in our proprietary algorithm, and match you with potential lenders.

Why Selling Rental Property is a Good Idea

The New York Times ran an interesting feature in March. The writer asked if rental property was really as safe and profitable as one assumed it was. She mentioned the story of a retired couple who had just invested in some property and mentioned the risks linked with their investment. Problematic tenants, costly repairs, and a long period of inoccupancy are some of the problems landlords face with rental property.

Renting is a profitable enterprise if you stick to your investment property for more than a few years. Inflation eats away your monthly mortgages while rents keep on rising. Initially, it will be very difficult to find tenants who are willing to pay rent that is more than your monthly mortgage – but down the line it will become easier. There are more than a few people who have been earning a large portion of their income by renting out properties.

There are many upsides to renting your property. The most attractive of them is having an asset. You are building equity that is being financed by someone. At the same time there are many downsides and risks to owning a rental property. The most common of these are:

(1) Problematic tenants

As a landlord, you will have to prepare a strategy to deal with tenants who do not pay rent on time. You may also have to be prepared to confront those who may make changes in your house without your knowledge.

(2) Emergency repairs

You are responsible for emergency repairs. You are in trouble unless you have a sound plan on how to deal with these repairs.

(3) Natural disasters

You will have to ask yourself if you can afford to rebuild your house following a natural disaster such as hurricane Sandy. Although housing insurance will cover a bulk of the costs, you will still end up spending more than you can imagine.

(4) Taxes

More rent income means more taxes. A large part of the monthly income that you get now will be going into your taxes

(5) Housing market and inoccupancy

Are you prepared to pay monthly mortgages for your investment property if the housing market starts marching south? What will you do if you fail to find a new tenant?

Unless you are prepared to deal with the above mentioned risks, it is perhaps a better idea to sell your rental property and invest the cash in more productive endeavors such as education and skill-development.

It is hard to sell an investment property, but it offers high profits. You can get an online value report on how much your rental property is worth. There are many websites that offer free home value reports, such asNeighborhood IQ. Taking that report as a base, you can put your property on sale. The government charges a higher tax on the sale of rental property. There is a way to avoid this if you want to stay in real estate after pocketing in the profits from selling your old property and investing the rest of the money into the new property.