Selecting Tenants

In rental real estate there are two parties, the landlord and the tenant. Since you are following along our real estate investing journey, I'll have to assume you are on the landlord side! As a property owner it is important to do a proper screening on anyone you'll be letting into your property. Here are a few tips on items we make sure of before signing a lease.

1. Income- Income is the name of the game. If someone wants to purchase anything, they have to have sufficient income to pay that bill. That is the same for paying rent. Our rule of thumb is to require that tenants take home pay is at least 3x the rent requirement. If it were less than this, any drop in income or unexpected bill could leave the tenant not capable of paying. Having an extra income is crucial for receiving payments consistently from tenants.

2. Background Check- Make sure you run a background check on tenants. Luckily there are several apps online to make this process easy and will be charged to the potential tenant. This allows you to see any past criminal history for the tenant. Do they have any arrests, felonies, or other concerns that might not make them the best individual to take care of your property? While people can absolutely change, it is still a necessity to do your homework and see if there is a past or previous evictions with these tenants.

3. References- If they have stayed at other properties in the past, require that they list their other landlords phone number. It takes very little time to reach out to a fellow investor asking them of their experience with the tenant. Most people will be more than happy to give their honest opinion of them and if they received payments on time. If all clears with the other landlords, you can probably expect a similar experience with the tenant.

4. Social Media- We live in a world where everything is public now. It is very easy to locate someone's facebook, instagram, twitter, etc and do some digging. Check out what they post about, their pictures, and who they hang out with. If you don't see anything deeply concerning then you can check this off your list.

These are some tips we've found to be helpful in finding tenants in Pittsburgh. While some people may be better than expected, and others may be worse, it is crucial to always do your due diligence before handing over the keys. It is better to wait for a great tenant than quickly sign off with whoever will pay the rent first.