If you’re on the hunt for the perfect tenant, here’s a guide based on my own experience as a landlord since 2005. Finding that ideal renter can make or break your experience in property management.
During a recent open house weekend, over 50 groups showed interest in my rental, with 20 submitting applications. After reviewing them, I narrowed it down to five top candidates, though honestly, choosing just one is quite challenging as all have solid financials and seem like decent folks.
Here are the profiles of my potential tenants:
1. The Doctor: A 35-year-old cardiologist who just finished his residency and has started a $300,000/year job nearby. He’s got $50,000 in savings but carries $130,000 in medical school debt. His cleanliness and solo living situation are big pluses, although his 710 credit score due to a forgotten payment could be a concern. However, after a visit with his more affluent doctor friends, he decided against the apartment.
2. The Newlyweds: This couple from New York, both business school graduates, earn $150,000 each and have no debt. The husband is being relocated by his employer, who is unaware of his apartment hunting, posing a challenge for obtaining an employment reference. They seem stable and could be long-term tenants.
3. First-Year Law Associates: Two young lawyers, each earning $160,000 plus bonuses. One offered to pay three months’ rent upfront. They’re quiet by necessity due to their demanding jobs but the roommate’s absence at viewing could be a red flag.
4. More Lawyers: Another pair of first-year law associates from a top-five law school. They seem great, but the potential for weekend parties given their age and gender concerns me.
5. Tech Entrepreneurs: Two 33-year-old MBA grads working in startups, pulling in similar salaries to the lawyers. They’re enthusiastic and have substantial savings. However, frequent visits from one roommate’s girlfriend might increase wear and tear.
6. The Googler: A software engineer making $450,000 a year with impressive savings. His commitment might be short-term as he could decide to buy a place with his girlfriend soon, making his stay potentially brief.
Choosing the right tenant involves weighing the potential benefits and risks associated with each candidate. Factors like financial stability, likelihood of long-term tenancy, and overall compatibility with property management goals are critical. Each candidate offers different advantages and potential issues, from financial robustness to concerns about noise and wear.
In addition to individual tenants, exploring real estate investment options like crowdsourcing can diversify your portfolio and provide passive income. With varied cap rates across regions, it’s a viable alternative to traditional landlord responsibilities.
Remember, the key to successful property management is not just in selecting a tenant but in ongoing communication and management to ensure your property is respected and maintained. Always aim to find tenants who will treat the space as their own, providing you peace of mind and financial stability.
