BiggerPockets

Tenants

Sunday, June 07

Tenants - How to Choose Them

A lot of money can be made in real estate with the buy and hold strategy.  The downside is the fact that you have to deal with tenants.  Although this can be a hassle, the benefits of owning real estate far outway the problems associated with tenants, especially if you do it right.

To begin with, you must do your due diligence on all potential tenants.  If you have a property manager, instruct them as to what you expect them to do when qualifying a tenant.  Then all documentation must come to you for your final approval.

Always do a credit and back ground check on each adult that will be living in the property.  Of course most tenants will have less then perfect credit so don’t expect it to be perfect.  Verify that there have been no evictions.  You’ll want to verify their income and expenses to be sure they’ll have enough money each month to pay the rent.  You’ll also want to call their last 2 to 3 landlords.  Many times their current landlord will tell you anything you want to hear just to get the tenant out of their property because they’re lousy tenants.  They’ll lie to you so that their tenant becomes your problem, and no longer theirs.  The landlords before their current landlord will be much more honest with you in most cases.

If I have a property manager, I still usually like to talk to potential tenants.  I introduce myself and ask a few questions.  Of course never give them your full name or the state you live in.  You don’t want them contacting you directly.

·       Ask “why are you moving?” a few times.  Asking this question a number of times over the course of the interview will give you a better chance at the truth.

·       How long did you live in your last residence?  How long in the property before that?

·       Inform them that you will be doing a credit check and a background check.  Ask them “what will I find?”  See if they’re honest.

In my next post on tenants, I will discuss managing the tenants once you have chosen them, so stay tuned.

William Barnard is Managing Partner of Nationwide Property Investments, LLC and President of Barnard Enterprises, Inc. Will participates in millions of dollars in real estate transactions each year and has experience in nearly every aspect of real estate investing, including rehab flips. Join his FREE Membership at www.nationwidepropertyinvestments,com and start or continue on your journey to creating wealth through real estate!

Comments

1. 

   Harrison Painter Reply
   over 2 years ago

   Your series is going to help a lot of people succeed my friend! Keep up the great content!!!

2. 

   Will Barnard Reply
   over 2 years ago

   Thank you for your kind words and support Harrison. It is much appreciated as are our phone conversations! :)

   Shoot me that email you promised.

3. 

   Joshua Dorkin Reply
   over 2 years ago

   I'm also looking forward to seeing what you've got for us, Will.

4. 

   Will Barnard Reply
   over 2 years ago

   Thank you Josh, we are very excited about filiming and posting the video feeds on our blog right here on BP.
   My local rehab project closes on Monday and I start the work. The filming will also start then as well.
   Stay tuned!

Post a Comment

Your Name:
Your Email:
	Subscribe to comments?