This is Part 2 in my Series, Finding the Ideal Tenant. In this post, I will be sharing my experiences with next steps and eventually what we did to find our new tenant.
So a few days or weeks have passed and after a handful of potential tenants you now have several applications and a lot of research to do.
The next step after reviewing each (completed of course) application is to request a credit score/report and a letter of income, mainly in the form of an employment letter. With each step, you are getting a sense of what the tenant is like and how they handle different situations, through emails and even phone calls, a tenant who constantly makes excuses or does not respond in a timely manner is usually one that doesn’t have the best organization and time management skills; not an ideal tenant.
It is important to give all applicants a fair chance, by allowing them to submit their full application and all relevant documents. Some potential red flags or situations which prompt further explanations include: unemployment, declared bankruptcy, social assistance and reluctance to provide an explanation or proper documentation are things to be aware of. After all, you want a tenant who has a stable source of income and will be able to make the rent payments.
Doing Your Research
You will likely receive proof of employment in the former either a letter of employment or 3 recent pay stubs. You will have to contact the employer and ask them to verify the details set out in same letter. Once you have verified their income and employment you can proceed in asking the potential applicants for a credit score and report. Generally, you want someone who has a decent score i.e. at least 650. It is also helpful to note their credit history and understand their payment habits. Take note of any payments made late and any mentions of collections as well as declaration of bankruptcy. If the person has a somewhat decent score and has declared bankruptcy in the past but has since kept their payments on track, then you can take that into consideration when making your decision.
DIY or Using a Realtor
Alternatively if you find that you don’t have the time, energy, patience, etc. to hold the showings and look into the applications yourself, you may enlist a realtor to find a tenant on your behalf.
This route comes with its own red flags including an uncooperative agent, one that doesn’t keep you in the loop, makes you do more than you have to? which should entail minimum involvement and does close to nothing throughout the transaction. They generally charge a fee for their services which is equivalent to one months rent.
Before deciding if you want to hire a real estate agent to help you, consider your options. It was a no brainer option for us as we lived almost 45 minutes away from the house and going back and forth everyday wasn’t feasible. Our experience using a realtor was a waste of money, and we regret not doing it ourselves. However, lessons were learned and we know better for next time.
Have you ever experienced renting out a property? Did you find your tenant on your own or opt to use a realtor?
Till the next and final post in this series.
Stay strong and beautiful!