Reducing the potential stress of being a landlord starts at the beginning. The process of securing the right tenant can easily be compared to building a home – if the foundation isn’t strong you could end up with a serious problem on your hands. 

Being a landlord doesn’t have to be hard… or stressful. But there are certain situations that you’ll want to be prepared for. From the relationship struggles that can result from renting to friends and family to the deceitful practices of experienced tenant-scammers, there’s a lot understand and a lot to be wary of.


You won’t be able to control every possible scenario, but you can prevent some unnecessary headaches. Doing your due diligence on the front end is the best defense to ward off future issues, and we’re here to help. Here are a few tips to help you get started.


background checks

This is a step that you don’t want to skip. Every potential resident should complete a thorough application and submit to criminal, employment, rental history and credit background checks. To eliminate out of pocket expenses and to make sure you’re compensated for your time, charge an application fee. 

Tips:

  • Use a service that allows for an in-depth tenant review. It should cross-reference previous places of employment and notice inconsistencies in the application. For example, applicants that are trying to deceive you will often misrepresent payment amounts and dates. It’s a small detail but to the right service provider, it will be a red flag.
  • Don’t just complete a local background check. Be sure that the service you use checks state, federal, and sex offender criminal history.
  • Complete an eviction and rental history check using a screening service that specializes in tenant screening. Not all evictions and past due amounts will show up on credit reports and you want to know as much as possible about who you’re renting to.
  • It’s okay to ask for a co-signor. If you have a young adult tenant or not everything on the application adds up, ask for a co-signor (usually a parent) to add an extra layer of security to the transaction.
Know your local laws. Some states require that certain criminal offenses are not held against rental applicants. Be sure that you’re aware of what they are so that you’re not accused of discrimination.

always verify income

  • The ideal tenant makes at least three times the monthly rent amount.
  • Request copies of paystubs. You can also ask for their most recent tax return avoid applicants that use fraudulent paystubs.
  • Call their employer directly to confirm their employment. Most companies will not confirm wages but they will confirm the length of employment and current title.

The credit check process also helps you determine the applicant’s debt to income ratio. This is important because it affects the tenant’s ability to pay. For example, if you have two applicants both with $3000-month income but one has approximately $1500/month in debt payments, while the other applicant is completely debt-free… which has a stronger ability to pay?

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crystal clear contract

The landlord-tenant agreement is made whole by the written and signed rental agreement not a verbal agreement and good faith. The lease term, security deposit, monthly rent and exact due date for each payment is the bare minimum that should be included. But there are many other things that should be considered and made part of the lease as well:

  • Rental late fees, eviction filing fees, and date eviction will be filed if the tenant defaults on the rent. This is very important and must be in writing. For example, you may decide that the rental payment is due on the 1st with a two day grace period. Then, after the 3rd of the month, the late fee accrues at a rate of $20 per day. In order for you to enforce this, it must be a part of the lease.
  • Define reasons any listed ‘refundable’ deposits may not be refunded to the renter (i.e.: property damage, delinquent rent, owed fees, not completing the lease term, etc.).
  • Pet policy. Even if you are not accepting pets, your policy should be clearly defined in the lease agreement.
  • Overnight guests and sub-leasing. Don’t treat this one as an afterthought. You’ll be surprised how many times a tenant will try to tell you that they’re live in boyfriend just stayed the night. In addition, you’ll want background checks on everyone over the age of 18 that will be living in the home. You don’t want a long-term stayover friend to end up being someone on the sex offender registry.
  • Damages and cleanliness policy. Define what normal-wear-and-tear means to you. List out the general expectation of cleanliness that you have for the tenant. Take the time to outline an approximate cost of potential repairs. For example, you may decide to charge $100 for a room to be painted or $75 to replace a broken ceiling fan. This can also be in the form of an addendum to the lease.
  • Utilities and lawn care (if applicable). Outline which utilities and exterior household duties are the tenant’s responsibility. Then, double check. Be sure to confirm that the tenant has transferred all utilities that are their responsibility to their name.
  • Do you have a break-lease clause? This means what are your terms for breaking the lease. Some property management companies charge two additional month’s rent and the tenant forfeits their security deposit, while others accept a 60-day notice and forfeiture of deposit. These terms are up to you.

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This is not an all-inclusive list.

These are only a few of the most important terms that you don’t want to overlook. The lease should be thorough but easy to understand. You want your new tenants to understand the terms and what is expected of them, without any confusion. comply with. If you need help creating the lease, find samples online or use this free tenancy agreement as a guide. 


Final tip: Always complete a walk-thru. Have the tenant sign off on the condition of every room. Some landlords film the walk-thru so that they have concrete evidence of the property’s condition.