As a new landlord, it’s incredibly important to make sure that responsible tenants live in your property. After all, you want renters you don’t have to worry about causing problems as soon as they move in. In order to pick the right tenants, consider implementing a robust screening process. Of course, with that said, there’s no screening process that will absolutely guarantee you won’t have problematic tenants. But screening will reduce your chances of ending up with a bad egg. And in turn, screening applicants can help save you money by providing stability and avoid costly property repairs from neglect or bad behavior.

Good renters are absolutely priceless because they take care of your property and you’ll be less likely to deal with neighbor complaints. And, you’ll be able to avoid the biggest headache of all: processing an eviction.

Below, we’ve assembled a helpful guide to ensure that your next batch of tenants is as wonderful and responsible as possible.

Create an airtight rental agreement

A good rental agreement protects both you and your tenants. It informs everyone of their rights and responsibilities. Here are a few of the components a rental agreement should include:

• Names of all occupants and occupancy limits
• Terms of the lease with lease end date listed out or if the property is month to month
• Property description 
• Payment terms
• Late payment information and penalties
• Subletting information
• Deposit information 
• Maintenance (landlord repair duties versus tenant duties)
• Neighborhood rules (HOA, quiet hours, parking, etc.)
• Severability clause
• Landlord contact information including name, number, email, and contact hours

Use a background check

You should never trust what an applicant says – someone might be desperate enough to lie to you in order to secure a place to live. So, to avoid renting to an irresponsible person, you’ll need to formally screen your tenants. A tenant background check will provide you with valuable information like their eviction history, criminal history, and other information that can easily show you potential red flags. 

If something comes back unsatisfactory from the screening, you can disqualify applicants who are risky. Perhaps an applicant seems great on paper, but the results of a background check showed a very low credit score. A bad credit score might indicate the person isn’t responsible with their finances and may not pay their rent on time – or at all. 

With that in mind, it’s still important you follow the laws outlined in the Fair Housing Act which prohibits discrimination of protected classes including disability, sex, race, religion, and age. Make sure you have evidence of a candidate’s lack of qualifications if you deny them the rental.

Be wary of cash payers

Although getting cash from your renters seems like a good idea at the outset since cash doesn’t bounce like checks or get returned like debit payments, you should avoid cash rent payments. While not all cash payers are engaging in criminal behavior, it can be a signal something unseemly is going on. For example, a renter who offers several months of rent in cash probably don’t want you around. If you decide to accept a renter who pays in cash, it’s in your best interest to ensure that the tenant is taking care of the property, so check on the home from time to time. 

Check references

When you’re evaluating a potential new tenant, it’s critical to check their references, especially their landlord references. To avoid fake references, double check publicly available information to make sure the applicant’s information matches up. 

Conclusion

As a new landlord, it can be hard to juggle all of your new duties effectively. You have to find a way to market your new property and then find responsible tenants so you can avoid the expensive and lengthy process of eviction. Good renters are sometimes hard to find but once you do, those tenants will make your job as a landlord loads easier.

It’s in your best interest to thoroughly screen new tenants. Tenant background checks show any red flags like convictions or past evictions. Regardless of which applicant you choose, it’s important that you follow all rules and regulations regarding housing discrimination. With these tips in your back pocket, you can easily run a profitable rental business that will provide you with stable income for years – if not decades – to come.

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