How to Look for a Suitable Tenant
Looking for a suitable tenant can be like looking for a suitable candidate for a job interview. You would want to have someone with great responsibility and is loyal to take good care of your property and pay rents on time. You won’t get to see your tenant everyday like they are your employee at the office. Yet, looking for the right tenant can make your life a lot easier and save you from a lot of troubles and time. There are some factors of consideration while looking for a suitable tenant, such as their income level, financial state, personality, lifestyle and so on. Here are some tips to help you look for a suitable tenant:
1. Run financial checks on your potential tenant
By running an income check, you are checking whether this potential tenant could afford your monthly rent and be on time in paying them. It is important to check whether or not they are financially stable. What you could do is to request from them their financial statements from the past three to six months to check up on them. Other than that, you could take into consideration to call up their employer to check up on their salary, whether or not they are accurate like what your potential tenant has reflected.
The rule of thumb is that you would have to make sure that your potential tenant’s monthly income before taxes should be at least three times the rental cost. For instance, if you are charging RM1,000 for your rental a month, your potential tenant should earn at least RM3,000 a month.
2. Run reference checks on your potential tenant
By running reference checks, you could find out more about the character of this potential tenant of yours. You could call up your potential tenant’s previous landlord to ask about the landlord’s past renting experience with the potential tenant. You could ask questions like “Has he/she broken any basic rules in renting your property?”, “Was he/she a delight to deal with and easy to reach?”, “Did he/she pay the rent on time?”, “Was your property left in good condition?” and so on. Another tip is to make sure that you are actually contacting the REAL landlord, not some friend of your potential tenant who is pretending to be the landlord.
3. Meet up with the potential tenant face-to-face
You might want to meet up with the potential tenant face-to-face so you could get to know more about him or her. This is like screening for the right candidate for the right position, you have to meet up face-to-face. If your potential tenant resides somewhere far away and could not meet up face-to-face, be sure to meet up virtually to have a chat with him or her. Make sure to have your questions prepared. Here are some questions you could ask:
- Do you smoke?
- Do you have pets?
- When will you be able to move in?
- What is the duration of your rental?
- Why are you moving?
- How long have you lived at your previous/current place?
- Are you able to pay the deposit amount?
- What are you working as?
- What are you parents working as?
- Do you have other siblings and what are they working as?
Even though you might already have some of the information on paper, you might want to observe whether or not he or she is truthful and sincere, and whether or not there are any inconsistencies.
4. Run background checks on your potential tenant
You may want to consider running a thorough background check on your potential tenant to find out things such as their medical and criminal records, as well as employment history. Ideally, you would want a tenant with no criminal records and someone with a clean background. To do this, many landlords adopt services to screen their potential tenants. Also, you could conduct an interview to run these checks on your potential tenant. Call up the potential tenant’s employers to ask about their characters, whether or not they are reliable and responsible, and how well do they communicate.
5. Make sure you have a clear and solid rental agreement
Having a clear, solid rental agreement will save you from a lot of troubles, time and ambiguities. In your contract, be sure to cover all your legal needs, what you will provide, what the tenant should do/not do and how much should he or she pay, when should he or she pay (be specific to include which date of the month) and other important details, such as a late fee will be imposed if the tenant is late to pay his or her rent, to protect you and your tenant’s welfare. In case there are any future disagreements or questions, you could always refer to this rental contract. Remember, clarity is the key to mutual understanding, make sure to be specific in your rental contract!