What you need to remember when choosing a tenant for your property?

Upon a quick look at any landlord insurance policy, you can see that a lot of the clauses relate to doubt surrounding the tenant. There is a lot of things that can go wrong from the home owner’s perspective that relate to the tenant of the building. For example, the tenant may be unwilling or unable to pay the rent, they may damage property or contents or there may even be some legal issue between yourself and a tenant down the track.

What you need to remember when choosing a tenant for your property?

That’s why it’s so important not only to have a comprehensive landlord insurance policy but to choose your tenant carefully. This article will discuss a few of the things you should keep in mind when doing so.

Upon a quick look at any landlord insurance policy, you can see that a lot of the clauses relate to doubt surrounding the tenant. There is a lot of things that can go wrong from the home owner’s perspective that relate to the tenant of the building. For example, the tenant may be unwilling or unable to pay the rent, they may damage property or contents or there may even be some legal issue between yourself and a tenant down the track.
That’s why it’s so important not only to have a comprehensive landlord insurance policy but to choose your tenant carefully. This article will discuss a few of the things you should keep in mind when doing so.

Credit and income

Perhaps the most important tenant characteristic you need to consider is their ability to pay the rent on an ongoing basis. Make sure you verify their income and that they are earning enough to make the payments. A good benchmark is that a tenant should be earning three times as much as they are paying for rent, but also take into consideration their credit and how much they owe. A credit check can provide you with information about how responsible they are paying bills.

Contacting their employer will not only allow you to confirm their earnings but also the kind of person they are.  A tenant with a steady job and some kind of structure are often more likely to be stable in their situation and more predictable, which can make for a smooth relationship between the two parties.

Past rental history

Looking over the person’s rental history is an absolute must. It will provide you with information about whether the person paid on time, provided enough notice before leaving and ultimately if they were a good tenant. You can also find out if they kept the property tidy, and if there were any incidences, problems or complaints.
Perhaps also check if the person is prone to moving around a lot, as this may not suit your situation. A potential tenant is frequently changing their living situation, for example, but you would prefer having a long term tenant move in.  

Criminal history and background check

When it comes to a police and background check, your best bet is to have a tenant screening provider collect the information for you and pass it to you. Doing so yourself can be time-consuming and quite cumbersome.
This information should cover any criminal history including minor felonies, which is important information to look over before you enter into an agreement with the person. Obviously, substantial criminal history should raise a red flag, but there are some ethical issues that come into this given that people with prior convictions are often discriminated against as a result of their past. Be sure to always look at the facts in context.

Personality and character

You can usually get a good sense of someone’s personality based on the above information; by chatting with their employer, checking over credit history, etc. But even if you feel this is all you need to make a decision, it’s always worth asking for a couple of character references as well as having a casual interview with the person.
Getting a sense of their personality and disposition can be really important to make sure they are trustworthy and reliable. Sometimes getting a sense of a tenant requires that you sit down and converse with them.
Taking the discussed factors into consideration can help you find the right tenant for your property, reducing the likelihood of drama later down the track. Even so, always make sure you have a robust landlord insurance policy in place to cover yourself in the event that things do go pear shaped.

About David

David Nicoll is a freelance writer and an independent blogger who writes for Finance, Landlord Insurance, Rental Properties and Investment Properties related articles. Connect with him via Twitter.