There are opportunities and challenges related to being a landlord. The opportunity is that property ownership is a lucrative venture if you know how to improve your bottom line. The challenge is to keep your rentals at 100% occupancy with good tenants that pay on time and follow the rules.
Investopedia says, “Residential rental property is the way to make money, or so some people claim. On the surface, it seems like a surefire bet; in reality, it’s usually more of a headache than it’s worth.” Experienced landlords will tell you a big part of that headache is finding the perfect tenant.
Today, there is a housing shortage, so how hard is it really to find good tenants for a rental property? This blog explores how to find the right tenants for your house or apartment.
How Hard is it to Find Tenants for a Rental Property?
This is a question to consider before entering the property ownership business. Right now, rental vacancies are at historic lows. At the same time, you need to worry about your existing tenants because one in five is considering a move next year.
The tighter housing supply is good news for anyone considering rental property ownership. However, don’t neglect your existing tenants, or you’ll find yourself with unexpected vacancies.
While seeming great on the surface, the housing shortage also puts pressure on landlords who may have several potential renters to consider. How can you pick the right one? What should you look for in a good tenant?
The American Apartment Owners Association (AAOA) says the following qualities make a good tenant:
- A solid credit rating of 700 or higher indicates that the potential renter will pay their debts on time.
- Verified income of about three times the monthly rent, or higher, if possible. Ask for recent pay stubs or bank statements to confirm this.
- No prior evictions—ever.
- A clean criminal background check.
- References that check out. You’re looking for a boss, coworker, former landlord, or someone other than a friend or family member.
- Prior stability in their rental addresses. Frequently moving around is a red flag.
- A properly completed rental application. Missing information makes the tenant seem shady or just sloppy. Is this the kind of renter you want?
In many markets today, landlords have some power to pick and choose their tenants. The AAOA’s criteria for finding tenants for your rental property is a good place to start. But how do you go about actually finding potential renters?
How to Find Private Renters?
Here are 10 tips for finding private renters:
- Start by hiring a property manager like Tenant Planet. Property management companies remove the hassle of being a landlord. Companies like Tenant Planet know the local rental markets. We have the technologies and expertise to ensure your property isn’t a revolving door but instead a lucrative cash flow with 100% occupancy.
- Hold an open house to attract potential tenants. If real estate agents can do it, so can you. You can hold a live open house or conduct one by setting up an online 3D interactive tour. Virtual tours are smart tools for showing your properties to prospective renters without the hassle of a live open house.
- Use rental listing sites to increase your marketing exposure. Some of the best online tools include:
· Zillow Rental Manager
- Put out a good old-fashioned For Rent sign, especially if the property is near a busy street. It may also lead to referrals from your existing tenants who have people coming to visit who are looking for a new place to live.
- Speaking of referrals, why not ask your existing (good) tenants to tell their friends about your property? This isn’t a request you should make to the tenants you’re not as happy with, of course. You can sweeten the referral by offering a lease incentive for any successful referrals who sign a new lease.
- Use your property website. If you don’t have a property website, you need one. That’s a good place to add your 3D virtual tour, too. This doesn’t have to be an expensive website to create, either. There are plenty of online templates for the do-it-yourself landlord. Wix and Weebly are two that feature website templates for real estate and rental property owners.
- Use social media. Facebook, Instagram, and Twitter are three great ways to advertise your apartment opening. It would help if you also invited your network to share the rental with the people they know.
- Online or print newspapers are another surprising source of potential renters. If you’re using a traditional newspaper, ask which days garner the highest readership from subscribers and then consider an ad to attract them.
- Flyers are another effective (if a little old-fashioned) tool. For a low cost, you might be able to hire a student or other worker to hand out flyers on a street corner during an event (check local laws to be sure you don’t need a permit) or to go around to coffee shops and put them on bulletin boards. The flyer should include your website which has that 3D apartment tour. Also include the rent amount and any amenities that come with a signed lease.
- Offer lease incentives and talk them up. Word-of-mouth marketing is still a great tool to spread the news. It’s a low-cost way of attracting tenants, but it still works.
If you’re struggling to find a tenant for your rental, consider turning the process over to the talented team at Tenant Planet. We have a turnkey operation for managing the entire rental operation, from finding and screening tenants to rent collection, property management, and more. Finding a private renter is hard, but not if you free up your time by using Tenant Planet. Call us today.
Should you have different criteria when choosing tenants for a single-family home over an apartment? The answer is no. You can still use a property management service, advertising, social media, or even referrals from other tenants to find great renters.
You should build a website for the property to help find tenants. Also use rental sites like Apartments.com, HotPads, Rent.com, and Zillow Rental Manager or other online websites where you can advertise your unit.