Without a property management company, you'll be left on your own to screen and qualify tenants that rent out your investment property. A people-person might even have difficulty when coming up with questions that are not nosey or against the law to ask. There are certain things that are necessary to ask and others that are against fair housing laws enacted by state law. As a landlord, you might have to ask tough questions over the phone or in person at your investment property. By law you will be required to use the same process of tenant qualification for every person that you interview. There are general questions to ask new tenants before renting your property.
Can You Afford the Cost of Rent?
This might appear to be a trivial question although it makes or breaks your profits. You can use the information that is provided to you in a verbal or in person interview and compare it with a background or credit check if required. As much as 30 to 40 percent of someone's monthly salary can be allocated to paying rent. Someone with debts that you do not yet know about could struggle to meet monthly rent payments. Find out in advance if a potential tenant can afford your property before considering their application.
How Many People Will Share the Property?
It is best if only two people are living in a one bedroom investment property to help reduce the costs of wear and tear during the term of a lease. Renting to what you think is one person and finding out 5 people are living in one property can be frustrating and expensive for you. You could also be liable for county fire codes and other issues.
Have You Had Past Evictions?
It is always a good question to ask if someone has been evicted in the past. You can usually tell a lot about the future of a landlord-tenant relationship from a pre-rental review. It is to be understood if a person has went through financial difficulty in the past and is re-establishing his or her credit. A person with numerous evictions on their rental record could mean that they are problematic and might not be the best fit for you. It can become expensive to deal with a tenant that raises many different issues during the course of a lease.
Why Do You Want to Rent a New Home?
The most common answer that someone will give when asked this question is either a job change or relocation from a different state. A person that complains in an interview about a previous landlord or a history of why they are misunderstood could be a sign that renting to them could cause problems. Keeping up your guard and being aware of how to "read between the lines" for given answers will help you choose the tenant perfect for your property.
Learning to be a landlord regardless if you manage the day-to-day aspects of your property will help you become a knowledgeable real estate investor.