You’ve probably heard stories about the tenant from hell: illegal sublets; unruly behaviour; strangers staying over. Not all tenants are bad apples, of course. But all it takes is a bite of said apple to leave an unpleasant taste forever. For the small-time landlord managing his/her own property, these issues could easily balloon into something of nightmarish proportions. Think months of unpaid rent; costly repair and maintenance works; and messy legal proceedings surrounding an eviction. So how do you avoid all this nasty business? Well, simply by finding the best possible tenant. Consider the following tips when leasing your property.
Like Attracts Like
Source: Real Property Management
Honey bees are attracted to wildflowers just as houseflies are attracted to rubbish. You want a bee, not a fly, so naturally your property needs to be decent in the first place. It doesn’t mean that you need a shiny new-build with top-of-the-line fittings and finishes. It just means that your property has to be neat and tidy, free of grime and odours, and have all the fixtures and appliances in good working order. Remember that your tenants, however transient, are looking for a place to call home. If you aren’t sure whether your property passes muster (what’s acceptable to you may not be acceptable to someone else), get a second opinion.
Ask the Right Questions
In order to separate the wheat from the chaff, your screening process is paramount. Think of it as a job interview, where you’re the employer and your tenant, the prospective employee. And like a good interview, asking the right questions will help you suss out the tenant’s suitability. First and foremost, assess their financial standing by asking “What’s your monthly take-home pay?”. This should be followed by “What’s your monthly debt/expenditure?”. It’s standard practice that a tenant’s income should be two-and-a-half to three times their monthly rent. If they’re leasing a room for $1,000 a month, they should be earning at least $2,500 to $3,000, after taxes. Their monthly debt/expenditure should therefore not exceed $1,500 to $2,000 respectively. If it does, they’ll not be able to foot the rent. Other important questions include “Who will you be living with?”, “Do you have pets?” and “Have you ever been evicted?”. Remember to be assertive, clear and fair during the screening process.
Do Some Snooping
Source: The Beijinger
Once you’ve identified a suitable candidate, it’s best to run some background checks. If they’re able to provide references, check with their previous landlord(s) to ensure that they were decent tenants. How long was their tenancy? Did they pay their rent in full each month? Did they leave the place in good order? Contact their employer to check on their employment status, as well as if their salary is what they claimed. Also double check all identification provided with authorities like the ICA (Immigration and Checkpoints Authority) or MOM (Ministry of Manpower). If in doubt, move on to the next candidate.
Heed Your Instincts
Listen to your gut. If you sense something amiss with the tenant’s application or when meeting them face-to-face, move on. It’s better to leave the property untenanted than to have one occupied by a less-than-satisfactory candidate. This is why it’s ideal for landlords to have at least a year’s rent set aside to cover the mortgage (assuming the property isn’t fully paid up). At the same time, manage your expectations: no candidate is going to be 100% perfect.
Be Flexible
Source: US News
You want a stable rental income, right? In order to encourage a longer tenancy agreement, be flexible. While it’s good to set some house rules, it’s also worthwhile to allow your tenants to make space their own. This could be as simple as allowing them to paint the walls, hang pictures, or add/remove pieces of furniture. If they’re made to feel at home, they’re likely to stay for a longer term.
