When you’re renting property, it’s important to conduct thorough background checks in order to successfully vet a potential tenant. A background check that includes rental and employment references, as well as personal ones, can give you a lot information about a potential renter that indicates how likely they are to pay rent on time and take care of the property.
So the question remains, how do you know what type of renter is best for your situation? Renters can be sorted into several different categories, including:
- Student Renters
- Professional Renters
- Low Income Renters/Section 8 Renters
- 55+ Renters
What follows is a discussion of each specific renter category and the pros and cons of deciding to rent to each one. Having this knowledge can help you make an informed decision when it comes to handing over the keys to a new tenant.
Renters who are students are one of the most popular categories of tenants, especially if your property is situated in an area with lots of universities and colleges. Owning a multi-family home, for example, in a college town, is going to guarantee you renters every year from at least September – June, or August – May, whenever school is in session. Many students opt to stay for the summer as well, especially if they have jobs nearby or if their family lives in the area already.
One of the big advantages to a student renter is that their parents will likely have to co-sign the lease with them as they’re likely to be paying most, if not all of, the rent. And if the student is responsible for it and they’re ever late, you can rely on the parents to pay up.
On the other hand, students are generally young with little to no rental history, so you can’t talk to previous landlords to see how responsible and reliable they were. Furthermore, many students at this age have a tendency to have parties and friends over frequently, which creates wear and tear on the house. in this case, you’ll want to charge a security deposit, typically equal to one month’s rent, so when the time comes for them to move out, you can use this money to repair anything that needs it.
Renters who have stable employment, a steady paycheck, good rental and personal references, as well as a strong rental history, are generally a safe bet when considering a new tenant. Unless something drastic happens and they lose their job, if their employment is stable, you’re guaranteed a rent check on time each month from a professional renter. If they have a strong rental history or maybe if they’ve owned property of their own before, they’ll know what it takes to maintain a place, both inside and out, and are more likely to take care of it. In addition, while they might be picky about their preferences, they’re probably more likely to take care of a small maintenance issue themselves rather than call the landlord. This is likely true especially if they’ve owned property before.
In addition, older, 55+ renters who are near retirement are much more likely to take care of the property compared to other potential tenants. They also are going to have a steady source of income as long as their jobs are still stable.
Low Income Renter/Section 8 Renters
Renters who qualify for government assistance will at least be a reliable source of rent on time each month, but because of their lack of responsibility for paying the rent, they’ll likely have less of an attachment or personal allegiance to the property. They’re less likely to take care of it, make maintenance requests when they need to, etc. This isn’t always true for every case, of course, but it does happen in many instances.
If you need assistance with acquiring a new property as a source of passive income, look no further than Life Liberty n’ Property. Send us an email today to find out how we can help.