5 Warning Signs You Should Watch out for in a Renter

Written by Posted On Tuesday, 25 June 2019 11:55

To remain successful as a rental property owner there are several things you need to be mindful of, including maintenance, repair, taxes, marketing and more. But the factor that could most strongly determine the profitability of your enterprise is your renter.

Here are some warning signs to watch out for when screening a renter:

#1 Their References Don’t Check out

There is nothing more important than a prospective renter’s rental history. If their previous rental property owners offer no complaints, then your potential renter is likely to pay their rent on time and treat their new home with respect. On the other hand, a renter with a questionable history can be problematic.

Likewise, if a person has had many addresses in a short period of time, then it could be a sign of instability. You want to avoid a renter who repeatedly ends their leases prematurely.

#2 Their Credit History Is Questionable

A credit report reflects a person’s financial reliability. If someone has a history of bad financial decisions, then they may struggle to meet their responsibilities as a renter. By learning to analyze a credit report, you can make the right decision.

While most renters are good and reliable people, some can be challenging to deal with. If you match with the wrong one, you could lose money, time, and peace of mind. For this reason, many property owners turn to professionals for help.

Learn more at rhenti about how their platform matches you with a renter who’s been thoroughly screened via credit and reference checks. At a nominal cost, their services lower your risk in the rental market.

#3Their Income Isn’t Enough

Generally, rent should account for no more than 40% of a renter’s income. If the numbers aren’t adding up, your prospective renter may have trouble paying rent on time, and the resulting strain on your cashflow will hurt your ability to meet your own financial obligations for your rental business.

#4 They Ask for Too Many Concessions

While it’s reasonable for a potential renter to negotiate, excessive demands can be a red flag. For example, if someone asks for rent to be much lower than market rates, wants to pay in installments, or refuses to give a security deposit, then they may cause problems down the road.

#5 They Ask Suspicious Questions

Most people will ask dozens of questions before renting a property. After all, they’re shopping for their new home. However, suspicious queries can be a cause for concern. For example, if your potential renter insists on bringing pets when you have a no-pet policy, then it’s probably a good idea to move on to the next rental application.

While these five tips will help you match with a good renter, it’s crucial to apply context to every situation. For example, many newcomers may not have a credit history or references despite being reliable renters. If they can compensate by providing post-dated cheques, then you can choose to be more accommodating.

Ultimately, it’s better to use a property management company that can do the legwork by thoroughly screening renters before matching them with you. This will significantly improve your chances of reaching your goals in the rental property business.

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