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Renting your house is an excellent source of income, but it comes with a key concern – finding the right tenant.
If your house falls into the wrong hands, there is a chance that your property will sustain some very regrettable and permanent damage.
Vandalism aside, the tenant may not pay you on time (or at all) and breach ethical codes that may turn your life into a nightmare.
To avoid that, here are five key tips to ensure that you find the right tenant for your house – one who will not only abide by the rental agreement but also practice his or her duty as a good and responsible resident.
1. Hire a real estate agent
Real estate agents have experience in dealing with hundreds of buyers, sellers and tenants. So, they know best when it comes to negotiating with your tenants to give you a fair rental for your property, and have the ability to handle all the legal procedures and the demands of the tenants.
Plus, their wide network will help you to determine the standard rental terms and conditions for your house.
If you are a first time owner with little experience in renting properties, it is best to hire experts to help you find reliable tenants.
2. Negotiate the demands
Some tenants would demand a lot of changes or extra items. To better ease this process, it is best to talk it out with the tenant and iron things out.
The goal here is to strike a balance between the tenant’s needs and your expectations.
3. Run a financial background check
A tenant can often intimidate you with their attitude and appearance, but don’t let it get the best of you!
Ask your potential tenant about their income source. It also helps to ask for their permission to run a credit check or request them to provide you with their latest salary slips – preferably from the last six months or so.
Some tenants may get offended if you run a financial query on them, but it is a necessary step to ensure that your tenant is capable of paying rent on time during their stay.
4. Call their previous landlords
It is also important to know how your tenant treated the last place they lived in. So, call up their previous landlord to make sure that the tenant is what meets the eye.
Enquire if they paid rent on time, about their behaviour during their stay at the house and whether the landlord considers the tenant as responsible and reliable or not.
This reference call is a must. If you can get more than one contact to verify your tenant, make sure to call every single one of them. Knowing your tenant before handing over the keys is much better than blindly putting your faith in someone.
5. Credibility check
A person can be a model tenant with excellent references, but that may not be the whole story.
Therefore, it is crucial to run a background check on your tenant to make sure that he or she does not have any criminal history, bankruptcies, civil conflicts, evictions or reports of violence in the past.
It can be very dangerous if the person living in your home is hiding from the law or is involved in any shady business.
So, verify your potential tenant’s identification card and relevant documents to ensure that they are not fake, or worse, hiding anything from you.
6. Final stage of screening
If all the checks above come with favourable results, then have a final meeting with the tenant.
Prepare a set of questions to ask so you can get to know them better. On top of that, make sure they provide you with these required documents:
- Copy of their identification paper (IC/Passport), to ensure their identity.
- Copy of employment agreement, to ensure they are employed.
- Copy of income receipt, to ensure they can afford to pay the rent.
- Copy of rental receipts, to ensure they can make consistent payment.
- One or more references, to verify their previous tenant history.
- Signed rental agreement.
- Deposit receipt.
7. Don’t rush
Remember, your tenant will live in your house for at least one year or more, so follow your instincts.
If you are not comfortable talking to them, then that person is not the right tenant for you – no matter how good they look on paper.
So, don’t rush your decisions. Think over your options and choose a tenant with a likeable personality, reliable background and one who meets your expectation.
This article was written by Fahri Ahmed for PropertyAdvisor.my, Malaysia’s most comprehensive source of property data, property analytics and insights.