More people are choosing to rent now than ever before, which means there is a larger pool of potential renters for investment properties. With increasing numbers of applicants, identifying the best-qualified tenants becomes more complicated. Finding well-qualified tenants requires a thorough screening and selection process and an understanding of how to weigh the potential risks it might reveal. It is also critically important to be knowledgeable on federal and state fair housing laws. Rental transactions account for more than 70% of all alleged fair housing violations on average.
Any landlord who has had a bad rental experience can attest to the importance of screening as the first step in avoiding negative outcomes. Good tenants are practically worth their weight in gold and provide relatively predictable cash flow for the landlord. Getting and keeping these tenants is the goal for all investment property owners and property managers.
Well qualified tenants have stable employment, sufficient income, and excellent credit history. Criminal background checks are also becoming very common as a screening tool. Prospective tenants who meet stringent qualification standards realize they are desirable and have options. As a result, they will shop for homes that are well maintained and priced competitively. They may also want to negotiate terms when considering more than one property or want a lease more customized to their needs. They realize they are in a bargaining position.
Attracting good tenants is half the battle – retaining them requires attention, responsiveness, and a good working relationship. Poor service, lack of communication, and unwillingness to address minor maintenance issues are the most common reasons good tenants will move when there are no other motivating factors such as military transfer.
Losing good tenants has costs. There are almost always turnover expenses with a change in tenants including painting and changing locks. Vacancy between tenants is always a possibility and can be lengthy if the market is saturated with available rentals or if the landlord does not price the property aggressively. Ultimately, it is far more cost effective to keep good tenants than to lose them over easily addressed issues and start from scratch to find replacements.
Important points to remember:
• Have solid WRITTEN selection criteria for tenant screening and be thorough in applying them.
• Recognize that good tenants have options. Be prepared to negotiate to secure them.
• Attentiveness and engagement foster good working relationships and increase retention.
• Retaining good tenants, even when it involves concessions, can be a net savings in the long run.
TREG’s property managers have the screening tools and process to thoroughly vet applicants and greatly reduce the likelihood of a bad rental experience. Sophisticated software, 24-hour emergency response, and a regimen of regular communication and notices help us provide a high level of service and maintain good tenant relations. Working with a professional property manager as your business partner is a sound decision to eliminate uncertainty and help maximize returns from your real estate investments.
Are you a property owner or investor that would like to learn more about our professional PROPERTY MANAGEMENT SERVICES? You've come to the right place! Don't forget to check out our current list of FEATURED RENTAL PROPERTIES that are located throughout Hampton Roads.