Leasing properties is an excellent way to beat inflation and build wealth over time. Unfortunately, many obstacles can prevent you from achieving your goals. One major challenge is obtaining good renters to help you maintain a positive cash flow every year.
In the real estate investing industry, you can hear horror stories of property managers or landlords who needed to evict a renter after a year due to non-payment or other violations. In fact, records show over 3 million eviction notices were filed in 2009 due to renters not paying on time or in full. In addition, over 1 million renters faced eviction for violating their lease agreement, including having unauthorized pets or guests living with them without the knowledge of their landlords.
The following are simple but helpful tips to help you find good tenants and double your income in the coming years:
1. Research About Your Community’s Average Credit Scores
Before showing any properties for rent, you must know the average current credit score for homes in your area by getting a report from one or more national credit bureaus, such as Equifax, TransUnion, and Experian. This way, you can know the tenant type you can expect to qualify for your property based on the monthly rent.
For instance, if you own a house in California renting for $2,000 per month with a credit score minimum requirement of 650+, chances are it will attract people with higher incomes like lawyers or doctors. But if you own a duplex in Texas that rents for $900/mo and requires at least a 620 credit score, it is most likely to be leased to blue-collar workers earning an average income (at best) and may not afford the additional monthly expenses.
Also, you may want to consider renting multiple properties in one location. This lets you save time and money while maximizing your chances of finding good tenants. In other words, consider owning numerous properties in one place rather than renting out houses or apartments scattered all around town that can cost you more money in car repairs from always driving from one area to another.
For instance, if you live in Huntersville, stick to renting properties in the area. This may also be useful if you plan to hire a firm to manage property in Huntersville.
2. Make Sure Your Potential Tenant Can Afford Your Rental Home
It becomes useless even if your property looks good for people to consider living there if they don’t meet your credit score requirements. In other words, avoid showing anything until after pre-approval. This lets you eliminate prospective renters who can’t afford your monthly rent payment.
3. Always Check Their Credit Score, In Addition to Their Credit Report
Credit reports allow property owners to deny a prospective tenant even if they actually afford their monthly rental fee. Sometimes tenant applications are returned due to simple misspellings of names or incorrect ages listed on the credit report even if their actual credit score is more than enough.
Make sure to always check a potential tenant’s credit score and not just their credit report. This gives you an acceptable limit for who may qualify to rent your property and who should be avoided entirely.
4. Hire Property Management Companies
Unknown to many rental property owners, they can benefit from property management agencies. There are several reasons why hiring these companies is your best decision, including liability. If your tenant gets hurt on the property and sues you, maybe you couldn’t afford it as these companies can.
The following are the many benefits of hiring a property management company for your rental investments:
- They have insurance
- They manage your tenants
- They inspect your units
- They deal with legal matters
- They look for tenants
- They make leases easier
- They manage repairs
- They manage rent collection
- They handle evictions
- They handle accounting
- They do everything else instead of you
If you’re looking for Charlotte realty companies, you may visit Alarca property management – one of the leading property managers in the area.
Choosing the Best Property Manager
Many rental property owners work with companies specializing in tenant placement or real estate asset management instead of an individual. If this is your case, it helps to know their experience and connections with local lenders and insurance agents. Some of the most experienced companies focus on certain market segments like high-end rentals or student housing.
Begin by checking their website for more details. Most companies list the services they provide and their certifications or specialties. Looking into their client portal can also be helpful, depending on what you’re looking for.
Visit the website of Alarca for more information on how it works.
