Renters occupy 41.4% of homes in Oklahoma City. To make a profit on your investment property, you need to know what makes a good tenant.
Knowing how to screen tenants will ensure the security of your rental income. But what is tenant screening, and what should you be looking for?
If you're not sure what to look for or how to choose a tenant, we've got you covered. Read on to learn about the top five tenets of screening tenants!
Good credit should be the first thing you look for in a potential renter. However, this means more than just a number.
In addition to the applicant's actual credit score, look at their outstanding debt and history of missed payments. While an applicant may have a high score, a large amount of debt could spell trouble for their ability to pay rent.
Even a tenant with good credit won't be a good fit if they can't afford to rent your property.
Be sure to verify income when screening tenants. Generally, a tenant that makes three times the rental payment will be able to pay with no issues.
It's true that a tenant making twice the rental payment can potentially afford it. However, one short paycheck or a week missing work and you may have a missed payment on your hands.
3. Criminal Background
This aspect of tenant screening can be complicated, so use your best judgment. You should probably avoid renting to tenants with a history of violence or other serious crimes.
However, you may give an applicant with minor infractions a chance if they have good income and credit. Be sure to include a space to explain any charges on the application.
Overall, a criminal background can be an indicator of an applicant's character. Be sure to find out details about any charges that appear on an applicant's screening.
4. Rental History
Like credit history and criminal background, a good rental history shows a tenant's ability to be a responsible renter. Ask for references from previous landlords.
Specifically, ask references about the tenant's respect for the property and if they paid rent on time. A tenant that landlords speak highly of will likely be a good choice for your investment property.
In addition to more concrete criteria like credit and rental history, you should pay attention to the way the applicant communicates with you.
The way an applicant addresses you on the phone or in writing can tell you a lot about the kind of tenant they'll be. If they respond quickly and politely, it's a sign that they'll be a good tenant.
On the other hand, if they seem unprofessional or are hard to get in touch with, they'll likely be difficult to rent to.
The Bottom Line on What Makes a Good Tenant
Choosing the right tenant can be the difference between making money and losing money on your investment. Use these five tenets as a guide for what makes a good tenant.
Are you unsure how to manage a rental property, or looking for more property management tips? Contact us today to learn more about managing your Oklahoma City property!