When you have an income property, your income often takes the form of rent. Your tenants are your money makers. They pay for the privilege of occupying the space you own. However, tenants are people, too. They have personal and professional failings, priorities and decisions to make, and value as people and business partners. To make money off your rental property, you must have tenants occupying your space in a reliable manner. To make the most of your economic opportunities, you must have the best tenants possible.
Tenants and Financial Risk
If your property is unoccupied, it’s not making money for you, which defeats the purpose of an income property. However, this is a common problem for owners of rental properties. Tenants may choose not to renew their leases. They may break leases and move out. Or, perhaps you’ll struggle to find tenants in the first place.
Worse yet, expenses don’t cease just because you don’t have tenants. While properties may not deteriorate as fast when unoccupied, they still need maintenance and repair, and the government still expects you to pay relevant taxes. Because of all of this, an unoccupied property can be something worse than unprofitable. It can drain your finances.
Problems can arise when you have tenants, too. If you don’t have quality tenants, you might find that your expenses start rising. Bad tenants may fail to report issues with the property, allowing problems to go unaddressed and leading to pricier repair and maintenance down the line. Worse tenants may harm the property themselves by failing to clean, throwing wild parties, or just being careless and destructive. Also, what if a tenant fails to pay rent? Legal remedies can be expensive and time-consuming. There are many risks associated with having the wrong tenants, just as expenses are associated with having no tenants at all.
The key, naturally, is to get your apartment occupied by the right tenants. But how do you do that? Let’s talk about some of the best ways to ensure that you can get a tenant — the right tenant — and start making money with your rental property.
Finding the Right Tenants
To find tenants, you must help tenants find you. A property must be marketed to prospective tenants. Cover all of your bases and make sure your property is offered in everything from real estate databases to bulletin-board sites such as Craigslist. Give real estate agents a heads-up, and make sure that your property is available for touring by tenants. Use free landlord software to display your property everywhere you should. Attractive photographs and detailed descriptions are, of course, a must.
With enough exposure, you’ll have options. Because demand for your rental property will allow you to be choosier with your tenants, you might need to find a way to choose between them.
To make sure that your tenants are up to snuff, you’ll want to get reliable credit and background checks done on each of them. Don’t be afraid to turn down a rental application. While unoccupied properties are costly, the risks and costs of bad tenants are truly severe.
If you use reliable landlord software to put the word out about your property, and if you take care to perform and examine background checks, you will be better-equipped to find the tenants that will make your property profitable without costing you in maintenance issues and payment problems.