“A Guide On How To Rent A Property To A Tenant”
So you’ve come to an article that aims to show you how to rent a property to a tenant. Is it your first time accepting tenants?
If so, relax.
You shouldn’t feel nervous or worried just because you don’t have experience in renting a property to a tenant. As long as you know the basics of the process, everything will be just fine.
But what if you don’t know anything about the process of choosing tenants?
There are a lot of blog posts on the Internet that will tell you how to rent a property to a tenant.
However, not all of them are reliable. Some are outdated or just plain inapplicable to all rental situations.
That’s why I decided to make this blog post about how to rent a property to a tenant. After this article, you should be able to rent property to someone without any hitches.
How to Rent a Property to Someone
This guide on how to rent a property to a tenant is not complex. It only contains the basic things that a property manager needs to know in renting a property to someone.
After this blog post, you’ll see that renting property to a tenant isn’t that hard.
With that said, let’s start this guide on how to rent a property to a tenant by preparing a rental application form.
Prepare a Rental Application Form
How to rent a property to a tenant? You should start by preparing a rental application form.
The rental application form will get important information about the potential tenant. The information you get from the rental application form can help you choose the right tenant for your property.
To make that possible, the rental application form should get the following information:
- Basic Information – This contains details about a potential tenant such as their complete name, address, contact information, and Social Security number.
- Employment Details – These are information about the potential tenant’s job. You’ll see details such as company name, position, salary, company address, and references.
- The Applicant’s Salary – Ask the potential tenant to bring documents like Form W-2 (Wage and Tax Statement), pay stub, and offer letter with salary.
The information from the rental application form can help you decide if the applicant is the right one. This gives you an idea if they are capable of taking care of the property or paying the rent in full.
The potential tenant must agree to fill and sign the application form. You will use their information for the tenant screening process.
Know how to prepare a rental application form. You need to do that if you want to know how to rent a property to a tenant.
Conduct a Tenant Screening Process
How to rent a property to the right tenant? You should conduct a tenant screening!
The tenant screening process is important. This will help you choose the right tenant.
This gives you an idea if the tenant is a good renter or not. The reason for that is that their background and credit history will be checked in this process.
Just a note though: make sure that you’re allowed to do the tenant screening. Tell the applying tenant that you’re going to use the information they presented in the rental application form for a background check.
Make sure that there’s written consent, to make it official or legal. You might violate a rental law if you use the potential tenant’s information without their approval.
Once you have the green light to conduct a background check, be sure that you know what to expect from the screening reports.
The information you see on the screening reports will help you determine if the potential tenant is the right one. You need to learn that if you want to know how to rent a property to a tenant.
Not all screening reports have the same amount of information. The quantity of content depends on the screening company.
Usually, the screening reports include reports from background and credit checks.
If you want to know how to rent a property to a tenant, you should have an idea of what data is unearthed in the tenant background and credit check.
Tenant Background Check
How to rent a property to a tenant? You must know the importance of a background check.
The tenant background check will help you verify the potential tenant’s identity. Also, it will give you an insight into their personality.
This will check their education and employment history, civil records, criminal records, references, etc.
Basically, the results of the background check will help you decide if the applicant is a good tenant. The reason for that is that this will also check their rental history for the past 7 years.
It’s best to focus on the rental history if you want to have a tenant who won’t cause any sort of damage to your property.
To help you do that, consider verifying the following information on the potential tenant’s rental history report:
- Property address
- Landlord name and contact information
- Dates lived in a residence
- Reason for leaving
Make sure to contact the applicant’s previous or current landlord and ask about their behavior. Ask things like whether or not the tenant is capable of paying rent on time or if they have ever violated the policies for renting a property.
Apart from the rental history, the background check will also give you the criminal record of the potential tenant. This will help you avoid tenants who are a threat to the safety of people in your rental property.
You need to learn that if you want to know how to rent a property to a tenant.
Tenant Screening Companies
If you don’t have any experience in doing tenant screening, you can hire companies to do it for you. Here are some of the best tenant screening companies:
- MyRental – One of the best tenant screening companies. They offer different screening options at a reasonable price.
- RentPrep – The best choice for property managers who want to verify key information about their potential tenant.
- LeaseRunner – They offer the most flexible screening options. Their clients can choose what they need from several rigorous reports.
- TurboTenant – All-in-one platform for property managers. Aside from getting a background report, you can also post your rental listing on its site.
- National Tenant Network – They produce a scored report from 0-100 that’s easy to read and includes a recommendation.
- My Smart Move – An alternative tenant screening service to MyRental. They provide accurate credit, criminal, and eviction reports with no hidden fees.
You can also hire other tenant screening companies. Just make sure that your chosen tenant screening company is operating legally.
They must follow the proper procedure for pulling information of an individual.
You can always use the Internet to check if your chosen company is operating legally or not. That’s how to rent a property to a tenant.
Tenant Credit Check
How to rent a property to a tenant? You must learn the importance of credit check.
The credit check can give you an insight into the applying tenant’s financial situation. This report contains the financial activities of an individual for the past 7 years.
The credit check will tell you if the applying tenant current has outstanding debts. Also, it can tell you how they handle their financial responsibilities… like how they pay for their bills.
You need to learn that if you want to know how to rent a property to a tenant.
All of the information in the credit report will tell you how the prospective tenants handle their money and obligations.
To give you an idea about it, here’s the information presented in a credit report.
- Identifying information – This is basic information including the tenant’s name, address, and social security number.
- Credit history – You’ll be able to see 7 to 10 years worth of bank account, credit card account, and loan information for the applicant. This also includes how long the account has been open, the account’s payment history, the loan limits, and any co-signers.
- Public records – Evictions, bankruptcies, tax liens, and any civil judgments.
- Inquiries – This includes the names of the persons who have requested a credit report for your potential tenant in the past 12 months.
You can use the credit report when deciding if you’re going to approve or deny the potential tenant’s application.
Look for warning signs if you don’t want to have a tenant who has financial problems. The potential tenant’s credit report should have no late payments or a large number of debts.
This is a clear sign that the applicant is financially responsible. You need to learn that if you want to know how to rent a property to a tenant.
It’s better to decline the tenant if the credit report shows a lot of late payments and unpaid debts. It’s more likely that they’ll have a problem paying rent at some point during their tenancy.
Be sure to study how a credit check works. You need to learn that if you want to know how to rent a property to a tenant.
Prepare a Rental Agreement
How to rent a property to a tenant? Well, you need to know how to prepare a rental agreement.
Arrange a meeting with the tenant. During your meeting, tell them the terms and policies of renting your property.
Everything you both agreed should be written in the rental agreement. You need to make a written rental agreement to make the tenancy formal or legal.
But if the tenant needs to move immediately, make sure that you already have a printable agreement.
Your pre-made agreement should already contain all of the necessary terms and clauses for renting your property. It should only require minor changes to make it appropriate for the tenant’s tenancy. You need to learn that if you want to know how to rent a property to a tenant.
To help you create a printable rental agreement, here are the usual clauses that you should include:
General Information of the Rental Property
The rental agreement should contain information about the rental property. This is needed so the tenant knows where they will move.
Also, be sure to include the names of the tenant(s) and the property manager. All of the people listed in the agreement are obliged to follow the terms and policies for renting the property. You must learn that if you want to know how to rent a property to a tenant.
Also, it’s best to describe the property in details. You can attach a floor plan to your rental contract.
This is needed so the tenant has an idea of how they will leave the property before moving out. You need to learn that too if you want to know how to rent a property to a tenant.
Give Specific Maintenance Information
The agreement should clearly specify who’ll be responsible for fixing damage to the rental property. That’s because maintenance duties can cause misunderstandings.
Make sure to specify the maintenance duties of both parties. This can prevent mix-ups in your rental property business. It’s important to learn that if you want to know how to rent a property to a tenant.
Pet and Parking Provisions
The agreement needs to address the terms regarding pets and parking. This is one of the subjects that often cause disputes with the tenants.
The property manager usually takes the blame whenever the tenants argue with one another. That’s the reason why it’s best to set the terms or policies regarding the parking space.
Doing this can help in preventing quarrels about parking spaces. You must realize that if you want to know how to rent a property to a tenant.
Aside from the parking space, you should also state if pets are allowed in the rental property. If you allow pets, be sure to state the rules or policies in your rental agreement.
Provide Details for Security Deposits
The security deposit is collected before the start of the tenancy. Its amount is often equal to two months of rent. You must learn that if you want to know how to rent a property to a tenant.
The deposit is often used to cover late rent payments. Also, it is used to fix damage made to the rented property.
You should specify in your agreement how you’re going to use the security deposit. Rental laws require a property manager to give details about the return and use of the deposit.
This is needed because the use of security deposit is one of the main causes of quarrels between the tenant and the property manager.
Having said that, be sure to state how you’re going to return it to the tenant. Also, explain what will happen to the deposit if a lease break happens. If you want to know how to rent a property to a tenant, you need to learn that.
Know how to prevent dispute and confusions. It’s a must if you want to know how to rent a property to a tenant.
Final Thoughts on How to Rent a Property to a Tenant
In this blog post, I talked about how to rent a property to a tenant.
How to rent a property to a tenant? Well, you should study how to make a rental application form. The information that you’ll get on that form is needed when you’re conducting a screening process.
The tenant screening process helps you choose the best tenants for your property.
Having good tenants isn’t enough. You also need to provide the right rental agreement. This can prevent mix-ups and quarrel in your rental property. That’s how to rent a property to a tenant.
If you have questions about how to rent a property, leave them in the comments below.
Disclaimer: This commentary is a matter of opinion provided for general information purposes only and is not intended to be taken as investment or trading advice under any circumstances. Information and analysis above are derived from sources and utilizing methods believed to be reliable, but we cannot accept responsibility for any losses any person may incur as a result of this analysis. Individuals should consult with their personal financial advisers. By using this web site or any information contained in it, the user specifically and expressly agrees that no advisor-client relationship is created between said user and any author, owner, executive, or principal of this web site by either use of this web site, or by any information, product, or service offered by or on this web site. No express or implied guarantees or warranties as to investment or trading results are made, and any perceived insinuations of such are hereby expressly disclaimed.