Make Your Real Estate Investment Pay Off by Choosing the Right Tenant
You made the decision to invest in real estate, and now you want to make money. There are a few rules to you will need to follow to make this happen, and it starts with purchasing a property which will produce income. The key to producing income is finding tenants who will pay every month on or before the due date. Following the 3 C’s Credit, Capacity, and Character in approving a tenant will lessen the risk of selecting the wrong tenant. Sometimes this is easier said than done, however by taking the following steps listed below you can make it happen.
- Take the emotion out of the decision, and do not be too quick to get a tenant in your property without thoroughly checking them out. It is expensive and time consuming to remove a tenant once you let them move in. By hiring a professional property management company, you can remove yourself from the decision and lower the risk of renting to an unqualified tenant.
- Use an in-depth credit application, and have the applicant fill in all of the blanks. You need the complete story on the people you are about to put in your home and investment. Many applicants will have had problems in the past, however “past” is the important word here.
- Do a Credit and Criminal Background Investigation. It is important to know that your prospective tenants pay their bills and have paid their past landlords for rent. Get proof of the most recent 12 months of rent payments, and check for judgments or collections on the credit report for past housing.
- Get a current paystub and last year’s W2 to prove income. If you have a self-employed applicant, get last year’s tax return and/or 1099. A good rule of thumb is the gross monthly rent should not exceed 30-40% of the applicant’s monthly income.
At Better Homes Realty Georgia Properties, we have 20 + years of processing and approving home financing and we protect your investment by using the 3 C’s to approve tenants before we move them into your home. We order both credit and criminal backgrounds on all of our applicants. Income is checked with paystubs, W2’s and/or tax returns to verify tenants have the capacity to make the monthly rent payment. Character is verified by reviewing credit, criminal background, talking to current employers and current and past landlords. We protect your investment because your investment is our investment. Call today and discover why Better Homes Realty Georgia Properties should be managing your properties.