One of the most important aspects (and probably the biggest pain point for many landlords) istenant screening. Getting great tenants can be the difference between the successful landlord and the one who loses money, burns out and becomes a motivated seller.
BiggerPockets has created a fantastic guide for screening tenants and I recommend all landlords to read this guide. It is comprehensive and hits all aspects of screening, from pre-screening through offering the apartment to the tenant. The guide is generally in line with our screening process and I had my wife (who does our screening) review it when it was first published.
One aspect that I want to stress is what the guides describes as the “Stress Quotient”. In our business, we describe this as the “Headache Factor”, but the general concept is the same. Here is how the guide describes the “stress quotient”:
The “Stress Quotient” – How Much Stress Will They Cause You?
The final quality of a great tenant is something I call their “stress quotient” or the amount of stress a tenant will cause you, the landlord. Some tenants are very high maintenance and constantly demand time and attention. Unless you are having a hard time finding quality tenants – these types will only cause more problems.
Our most important factor, and the final factor before offering an apartment to a prospective tenant, is the “Headache Factor”. The best way to describe it with a recent example.
We had a 3/1.5 single family for rent. This was originally going to be a flip but we have not been able to sell it. Since we planned multiple exit strategies (which you should ALWAYS do), we turned it into a rental which may eventually become a rent to own. Our most recent …read more