Investing in rental property can be a real money maker these days, especially since real estate prices are still fairly low in the wake of the recent economic crisis. While the prices of real estate are low, demand for rental property is higher than ever. Foreclosure rates have skyrocketed, leaving many previous homeowners looking to rent. Investing in a rental property can provide you with access to a market teeming with prospective tenants, giving you an edge when it comes to screening and selection.
You will find that tenant selection is everything when it comes to rental property management. Choosing the wrong tenants can spell disaster, but there are a few things that you can do to help make it easier. Checking references and work history is always recommended, but there is more you can do on top of this. Screening credit histories comes with a fee, but you will find that a person’s history of keeping up with their debts says a lot not only about their ability to pay rent, but often about how they will respect your property and your investment as well.
When looking for the ideal tenant, it is important to really ask questions when conducting interviews. Find out the work history of each tenant and take the time to engage prior landlords in conversation when doing reference checks as well. Were their apartments well-maintained? Were there issues with pets, noise, or children who fail to obey property rules? Did the tenant leave the property in the same condition it was found in? Do the tenants smoke, drink, or otherwise engage in conduct that would put your property or the safety and quiet of neighbors in jeopardy? Time and again, landlords fail to ask the questions that really matter.
If you are looking to attract the optimal tenant selection, it is also important to consider wording when advertising your rental property. State in advance your policies on noise, pets and smoking, and work to state what you are looking for in a tenant. Describe the property and the neighborhood accurately. Is it quiet? Safe? Family friendly? Look for attributes that will appeal to your primary desired tenant demographic and you will find that it is much easier to bring in the types of people you are looking for. Tenant selection will make a huge difference and can help make your real estate investment more profitable.
By: Ken Boutilier
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Ken Boutilier is an Atlantic Canadian based real estate investor, trainer, speaker, consultant and entrepreneur who has combined his knowledge of real estate investing and Internet marketing to train and teach others how to increase their cash flow through successful real estate investing. Learn more at Real Wealth Atlantic.