The goal of every landlord is to find an ideal tenant. Whether you're renting a residential or commercial property, a good tenant is someone who pays the rent on time and treats both the property and any surrounding neighbors with respect. This guide offers advice and tips to help you find great tenants for your rental property.
How Do I Find Tenants?
Depending on your area and the current rental market, competition for tenants will vary. Therefore, you want to ensure that your rental property is visible not only online, but also in local media, such as newspapers, rental advertising magazines, or other publications.
Advertising your rental property
Before you begin writing your rental advertisement, it's important to research similar properties and determine your pricing based on the local market. Also, consider your audience: if you are renting a residential property near a university, for example, then you may have more student applicants, so try to showcase anything about your property that may be beneficial to them (e.g. proximity to the university or easy access to public transit).
It's also good practice to include any rules regarding the suite in your ad, such as if you allow smoking or pets.
When advertising a residential property, take quality photos of all the rooms inside the suite, as well as photos of the outside areas. If you have additional features that you want to highlight, such as underground heated parking or access to facilities such as a gym, pool, or tennis court, then be sure to take photos of these areas to include in your ad.
Similarly, if you are renting a commercial property, showcase what you believe the tenant would be looking for in your photos. As an example, if you are renting a retail or office space in a strip mall, be sure to take photos that show the entire interior space as well as the outside surrounding area so that the tenant can gain a good understanding of the rental space.
Once you've taken professional photos, you can begin writing your rental ad. The goal with the content in the ad is to give a detailed overview of the rental property, as well any reasonable expectations you have of your tenants.
Here are some examples of terms that apply to both residential and commercial tenants that you may want to include in your ad:
- Rental price, frequency of payments, and whether rent includes utilities
- Security deposit amount
- Length of the lease (monthly or yearly) and the date the property is available
- The size of the property or space, as well as specific details (such as number of rooms or floors)
- Incentives, such as parking or any amenities included with the property
- Location of the property, with any positive highlights (such as if the property is easily accessible by driving or public transit, or near popular businesses)
- Your contact information and preferred method of contact
Your rental ad must also follow the Fair Housing Act, in that it can't include any preferences or limitations regarding potential tenants based on race, skin color, religion, sex, handicap, familial status, or national origin.
What Questions Should I ask Potential Tenants?
Potential tenants should fill out either a Residential Rental Application or a Commercial Rental Application depending on what type of property you are renting.
A Residential Rental Application RRAPP should include relevant and detailed information about the applicant, as well as an overview of the property that the applicant is interested in renting.
A Commercial Lease Application RCRAPP should include similar detailed information, but should also outline other details, such as the square footage of the building, so that operational costs/expenses can be calculated.
After determining which applicants are suitable, you can contact them for an interview. The interview gives you and the potential tenant the opportunity to get to know each other better, as well as to ask each other any pressing questions.
Here are some suggestions of the types of things you can request from potential tenants as part of your vetting process.
For commercial tenants:
- Conduct a business background/credit check, and verify references from previous landlords to determine if the tenant's business can afford the rent. Some landlords also ask for a personal credit check, so they know that in the event the business closes, the tenant would still be able to pay rent until they vacate.
- Verify how many years the tenant has been in business (a new business has a greater risk of closing and/or not making enough money to pay rent.)
- Is the prospective tenant's business appropriate for the area they want to rent? As an example, if you own a strip mall property, you wouldn't want two of the same type of business to operate next to each other, such as a coffee shop next to a coffee shop.
For residential tenants:
- Conduct a background/credit check, and verify references from previous landlords and/or employers to determine if the tenant is reliable.
- Confirm the date the tenant is planning on moving to the property, and if they will be able to pay any move-in costs.
- Verify how many pets the tenant has, including the type, such as a cat or dog, and the size of the animal(s).
- Confirm many people will be living on the property/in the suite so you can determine if the size of the property is appropriate for the tenant.
Similar to when you advertise your rental property, any questions that you ask potential tenants must adhere to the Fair Housing Act.
How Does a Landlord Choose a Tenant?
Once you have a list of prospective tenants, it's time to go through the information and determine which tenant(s) would be right for your property.
Some qualities of a good tenant that you may want to keep in mind while you are going through your applicants include an applicant who:
- Pays rent on time
- Maintains the cleanliness of the property or suite
- Has life stability (if the tenant has moved from place to place within the same city within a short period of time, that may be a red flag)
- Has good references
Choosing the Right Tenant
Taking the time to choose the right tenant for your rental property may seem like an exhausting process, but it is worth the effort. If you perform your due diligence when renting out your property, you're sure to find long-term tenants.
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