As a real estate investor, having bad tenants can make the experience can go south quickly. From owner to owner, the process for selecting tenants varies. There’s a variety of questions to ask and procedures to follow. To prevent possible problems, consider these recommendations when looking for tenants for your rental property.
Require potential tenants to complete a rental application. Be sure to ask about:
- Credit history
- Rental history
- Make sure the application outlines the length and terms of the lease, the cost of rent, and the security deposit required.
- Require a small deposit be turned in with the application to hold the property while you conduct credit, rental, and background checks.
- Properly screen all applicants to determine their credentials. Inform tenants that their credit and references will be checked in accordance with the Data Protection Act.
- Become familiar with the Federal Fair Housing Act that prohibits discrimination in renting practices based on race, religion, national origin, gender, age, familial status, and physical or mental disability.
- Refuse applicants based on legitimate business reasons, such as poor credit or bad rental history. Do not refuse for personal reasons.
- When renting out your property, make all tenants sign a Tenancy or Lease Agreement. Outline who will pay for utilities, take care of snow removal, maintenance duties, lawn care, and similar responsibilities.
- Include the insurance requirements of both parties, such as the landlord’s responsibility to insure the building and premises, and the tenant’s responsibilities to insure all contents.
- Include documentation with the Lease Agreement noting the full inventory and condition of the rental property before the tenant moves in.
Still have questions about your risk? Contact an MMA advisor today and take the necessary actions to get protected.