If you want to find the best possible tenant for your rental property, we strongly recommend that you qualify your tenants before you even show them the property. There are a number of questions we ask as soon as a potential tenant calls about a property:
- Why are you moving?
- How many people will be living in the house?
- What is your total income?
- How much debt do you have?
You need to ask potential renters these questions because you want to know who you are showing your property to. If the person isn’t qualified, it will be a waste of time to show them the house. You don’t want to put yourself in danger either, by showing a vacant property to someone you have had no contact or conversation with.
It’s important to do a little math when you’re looking for your best tenant. For example, if someone calls to inquire about your rental property and you are going through your pre-qualification process, you might find out that the person earns $60,000 per year. Divide that amount by 12 months, and you’ll see that the tenant makes $5,000 per month. You want to multiply that amount by 41 percent, which gives you $2,000 a month they can presumably afford in rent. If your property is $2,000 a month, this sounds like a well qualified tenant. However, you need to start deducting the credit card payments, car payments and other debt payments that will need to be made every month.
After you subtract all the other bills they have to pay, you might find out that they can really only afford about $800 per month. You don’t want to put someone into your home who cannot afford it. You’ll only end up back at square one, looking for a new tenant to whom you can re-rent your property.
Always qualify a potential tenant as if they were buying your house. When you do that, you’ll ensure they have the money to pay rent and you won’t have to worry about losing any income.
If you have any questions about finding the best tenant you possibly can for your rental property, please contact us at Lorac Realty and Property Management, and we’d be happy to help you.