Building an investment property is a smart move for the future. With the right mortgage and rental price, you can make money each month with little effort. Unlike when you purchase an existing property, a new custom home ensures minimal maintenance because all of the materials, fixtures, and appliances are new. Having a quality home also allows you to charge at the higher end of the rental range in your area.
However, it’s also important to protect your investment so that you can continue to generate rental income. Finding quality tenants who will respect your property as much as you do is critical for maintaining the condition of your rental units. Use these tips to attract the types of tenants you can trust.
Create a High-Quality Listing
Quality attracts quality. When posting an available unit on craigslist, Facebook, or local rental sites, create a post that matches the quality you are seeking. You don’t necessarily need professional photos, but the better the images look, the more interest you will generate. Post at least 12 high-quality photos and, if possible, create a video walk-through that gives potential tenants a feel for the layout.
Use Your Personal Network
When you have a unit available, let your friends and family know first. Ask them to share the listing with their networks or to recommend potential tenants whom they know. Although you will still have to evaluate whether each person is the right fit, getting referrals and selecting tenants from your extended personal network increases the likelihood that they will be responsible and trustworthy.
Target Professional Organizations
Send your listing to nonprofit organizations, hospitals, larger businesses, and other local professional groups to broaden the applicant pool. In some cases, organizations will actually rent your home to provide housing for the professionals they hire. This is a great option for maintaining a steady monthly flow of rental income, but it does come with some risks if they intend to use it for short-term stays—so make sure you discuss how they intend to use the home before you commit.
Work with a Realtor
Some Realtors work with clients to find and secure rental properties. Although it might cost you a month’s rent, working with a Realtor ensures that the people who rent your home are serious about finding a high-quality space. A Realtor might also help you evaluate potential tenants by handling application forms, background checks, and credit history research.
Look for a Strong Rental History
According to Zillow’s 2018 Consumer Housing Trends Report, 70 percent of renters are moving from another rental property. This means that most of the people you will consider as potential tenants probably have a rental history. Ask for contact information for prior landlords and contact them to learn more about the individuals you are considering. Find out whether they consistently paid rent on time, what condition they left the residence in, and what the relationship was like with their landlord.
After you post a listing, be prepared to efficiently communicate with applicants. When you find a potential tenant you like, make sure your response times are quick. Remember that a quality tenant is also looking for a quality landlord, so your behavior will play a role in their decision. According to the Zillow report, 28 percent of people will move on to the next listing if they don’t get a response within 24 hours.
Communicate on the Phone
Include your phone number in the listing and keep your phone handy. It may be surprising in the modern world of emails and texts, but according to Zillow, the many renters prefer to call a landlord when they are considering a listing. Just 4 percent will text, 16 percent will use email, and 36 percent will call when following up on a listing. If you’re not prepared to answer your phone, you could be missing out on quality tenants.
Get Authorization to Perform Research
As part of the application process, ask potential tenants for written permission to perform a criminal background check, an eviction report, and a credit history check. Just the act of asking for this information can weed out higher-risk tenants, and when you get the reports, you can determine who is the best fit for your rental.
Offer a Quality Home
One of the best ways to attract quality tenants is to offer a quality product. When you build a new custom home with Adair Homes, you can be confident that the materials will both look great and be easy to maintain, so they will stand the test of time. Check out some of our investor favorites to choose a floor plan and download our free guide to building and renting your first investment property to learn more about how you can plan wisely for the future.