So you’ve chosen to rent out your home in order to hopefully make it a great investment with a profit that shows at the end of each month. With the amazing benefits a house has by being locating in Colorado Springs, there’s no reason why you shouldn’t be able to find at least a few renters to cover the bills and mortgage, plus more. While you want to be able to rent out your house as fast as possible, there are some precautions that you need to take as you consider each potential tenant. You don’t want to end up choosing tenants who end up costing you money, rather than making you money, and while you can have property management professionals monitor your home, you don’t want them to come back to you with problems from the tenants either.
You have to make sure that you’re carefully considering each person, make sure that they pass background checks and don’t have a criminal background that may cause you to worry. Also, one great idea would be to ask for references, that way you can hear from other people besides the tenants how trustworthy they can be.
If this isn’t your first rodeo with tenants, you may already know about the following red flags, but you may also need to brush up on your knowledge after a tough go-round with recent renters.
Trying to negotiate price or paying deposits
If a potential tenant seems to be trying to negotiate with you on the price you want to charge them for rent, or the initial fees they need to pay such as a security deposit, you should avoid signing a contract with them. If they’re already negotiating the price after you have told them numerous times it’s final, chances are they’ll try to get around paying you the agreed amount each month. You can say that’s fine because you know they’d be breaking the contract and they can be penalized for that, but it is one stress and worry that you definitely do not want to deal with.
They move more than usual
We could understand a move every couple of years or so, but if you notice that the potential tenants have moved around Colorado Springs so frequently that it’s suspicious, you should ask some questions. If they don’t have a way to back up their reasoning, you should not choose them as the tenants. The last thing you want is for them to move in and then break the contract mid-lease, leaving you in a panic to find more tenants as soon as possible. In case of a scenario like this happening, you should always have enough money saved up to cover the rent for three months.
While you may not consider this a red flag, it can be one for some. There are some perks to having family live in your home, such as being able to trust that they won’t absolutely destroy the place, at least let’s hope not! But with those perks can come more frequent troubles. Family makes it personal, which also makes it easier for the tenants to overstep the boundaries that are usually there with people you don’t know. Meaning that it can easily turn into a situation where you aren’t getting the rent on time, or they’re running up the utility bills because the feeling of responsibility may be a bit less.
Trying to avoid a credit check
A smart thing to do would be to run a credit check of any potential tenants. You want to make sure that they’re able to pay on time. If you bring up the fact that you’d like to check their credit and they try to dodge it by saying anything like, “There’s no need for that, we have the income to pay on time,” take precautions. They may show that their employment allows them to afford your house every month, but they may have debts they owe that could come in the way.
Haven’t been able to have a steady job
It doesn’t matter if they work full time at a corporate office or even at a restaurant, as long as their salary permits that they can afford it, they should be good in that department. But this can easily become a red flag when it seems like they’re jumping from job to job because they may not be able to pay rent on time if they’re in between jobs.
These are just a few of the many red flags that you should keep an eye out for when determining who your tenants are going to be. Remember not to rush the process, we understand that things can be a little tight and you need help paying for the mortgage, but you don’t want to sign a contract with a tenant that will give you more trouble than help. For assistance in renting out your home, please contact the highly experienced professionals at Merit Co today.