Let me share the guiding philosophy for long-term real estate investing with you.
Your ability to regularly find and keep excellent tenants determines whether your real estate investments are successful or unsuccessful.
No matter how fantastic a deal you received on the property or how solid your projected cash flow and return on investment are, in the end, none of that matters. Without excellent tenants who respect your property and pay rent on time, your equity, cash flow, and profits all vanish into thin air.
Thus, the subject of how to find excellent tenants for your investment property follows naturally. The answer is hidden in the quality of the asset you are planning to buy soon. Let’s say a proud investor has taken an interest in park view society, but there must be some factors that drove him to make the decision of investing or buying the property right?
Take a look at the ultimate checklist.
1- Condition for moving
Excellent tenants place a high value on the property’s condition and, more especially, on their ability to move in immediately. You can rent out a house that needs some work (painting, new flooring, cleaning, etc.), but I can guarantee that the tenant won’t be a good one.
Your desired tenant has high expectations for upkeep and cleanliness and plans to take good care of your property. By offering a house that is ready to move into, you are signaling that you adhere to the same standards.
2- Nearby to the workplace
Everyone hates to commute, let’s face it! Therefore, outstanding renters place a high value on their location near job centers. Even though your home is excellent and is close to excellent schools, it won’t matter if your tenant has to drive an hour each way to work.
Consider where your ideal tenants are likely to work and how close the property is to that location as you look at suitable homes.
3- Required upgrades
The majority of novice investors believe that their investment properties need just be “good enough for a rental.” As a result, they buy starter homes with subpar finishes and rent them to tenants who produce subpar outcomes.
Avoid doing that and instead invest in houses with thoughtful additions that attract outstanding tenants, such as hardwood floors, granite countertops, stainless steel appliances, covered patios, etc.
4- Installed goods
When renting out your house, your tenant faces significant upfront costs. In addition to paying the first month’s rent, they must also pay the security deposit. If your rental doesn’t come equipped with a refrigerator and a washer/dryer, the tenant will have to pay for those goods up in advance, raising their cost.
By giving them those appliances up front, you can reduce the resistance to their decision and make it simpler for them. Frequently, your tenants won’t mind shelling out a little bit extra for a home with all appliances.
5- Community Quality
Lifestyle quality is influenced by neighborhood quality. Consider the neighborhood where you currently reside. Didn’t the local amenities play a significant role in your decision to settle there? Wouldn’t your lifestyle be different if your area had tennis courts, lakes, swimming pools, biking routes, gyms, and so on?
Quality neighborhoods are important to good tenants. All of those conveniences are not required, but the more the better.
6- Property’s age
Investors and their tenants have one thing in common: none of them enjoys difficulty. The age of the property is the key determinant of how much trouble either may encounter.
The older systems (plumbing, electrical, and HVAC) in older homes are more likely to break down frequently, causing inconvenience for both you and your tenant. Instead, invest in more recent properties. A decent guideline is to keep your children under 15 years old, and if possible, under 10.
7- Property rent
Not to mention that both you and your potential tenant must make business decisions regarding your investment. The relationship between the rent and the price you paid for the home will be a problem for both you and your tenant.
Make sure the expected rent isn’t too high to restrict the pool of potential tenants or too cheap to degrade the quality.