Rental Property Investment 3-in-1 Value Bundle: The Best Guide For Beginners To Learn With - Rental Property Investment 101 + Rental Property Management 101 + How to Build an Empire with Fix and Flip by Franklin Christopher

Author:Franklin, Christopher [Franklin, Christopher]
Language: eng
Format: epub
Published: 2020-08-30T00:00:00+00:00

CHAPTER 6

SELECTING YOUR TENANT

Now, after doing all the work from buying to preparing the property, you’re wondering who’ll your first tenant be! Are there any guidelines which I can use to select the right tenant for my debut rental property? Tenant selection and screening are a little stressful but a great learning experience as you’ll find, many people who’re trying to convince you that they’re the most fir for the position of the tenant.

CREDIT CHECK

The financial aspect of renting is one of the most crucial elements as you might have obligations ahead or which you may depend on the rental income, and any delay can be painful for you.

A credit check of the aspirant tenant is something that you can't take for granted. Credit checking includes the history of loan repayments, defaults, bankruptcies, or any other history of financial fraud or defaults .

Make sure to obtain the list of bank accounts, credit accounts, loans. Documents related to this list will provide you with enough information about their repayment pattern, and any outstanding or delay payment. Ask about the type and terms of the loans, and most importantly ask about any delay or failure in payment.

You must actively look for the bankruptcy status if they have any discharged bankruptcy than don’t hesitate to ask about the details like causes about financial stress and how they take themselves out from that position. Past bankruptcy is fine but not the pending bankruptcy as it’ll free them from paying any rental obligation. So, analyzing the credit report in detail is critical. The landlord must do it.

The primary purpose is to ensure that we're renting our property to someone who has a decent history of fulfilling their financial commitment. A credit score matters a lot in the selection of the right tenant. There're many agencies which can help you with that, so if you don't hesitate to take their services rather than regretting the lousy decision later.

At last, make sure that you have the application properly as some of the potential tenants use the clause of not taking the credit check, and if that’s the case communicate the need of credit check and take the signature on the document stating their agreement to the credit check.

INCOME AND SUSTAINABILITY CHEC K

As we all know, past success is not the guarantee of future performance. And you must not rely entirely on the past information for the tenant's future performance. Instead, make sure you know about their current employment/source of money. See the bank statements of the past 12 months or more to get the real idea of their financial position. And do little math, to know if they did have enough income to pay all the bank loans, rental obligations, or any other liabilities. And don’t hesitate to ask about how they’ll manage to pay rent if your calculation shows the adverse result. Be aware that all the documents have a similar name and related details to ensure authenticity.

PREVIOUS RENTAL HISTORY AND FEEDBACK

Take the list of all past rental agreements, to know their streak as a good tenant.

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