Real estate is a very valuable thing. The real estate market has grown over time, and property values now make it wiser than ever to hold onto properties. The real estate boom is happening in areas all across the country, experts say. There is no shortage of renters looking to pay for the privilege of living in one of these real estate properties, either. More Americans rent their homes right now than at any point in the past 50 years. No wonder, then, that landlords large and small choose to rent out spaces not owner-occupied. Why sell a home when you could keep it and profit from it at the same time?
However, of course, owning a rental property is not without its risks. Few greater risks exist than the risk of renting to a tenant who refuses to pay his or her rent. Deadbeat clients create a nightmare for landlords, especially small property owners who rely on just a few (or even just one) rental property to make their profits. It’s vital that you not allow a deadbeat tenant to occupy your valuable space. Here’s why, and how to avoid it!
Deadbeat Tenants: A Worst-Case Scenario for Property Owners
A great deal can go wrong when you own a rental property. Plenty of risks and headaches, experiences landlords and property managers know, but it’s all worth it when your property returns a profit. That’s why, of all of the major risks associated with owning a rental property, there is perhaps none greater than renting to a tenant who refuses to pay his or her rent.
Deadbeat tenants occupy your rental property, keeping you from renting it out to a different tenant and beginning to recover your losses. They may also fail to fulfill basic obligations like keeping the space clean and alerting you to potential maintenance and repair priorities on the property. Evicting them can be prohibitively costly and time-consuming, and a deteriorating relationship with a tenant can lead to vandalism and other crimes.
Avoiding Bad Tenants on Your Rental Property
Most of us would find it hard to believe that any single person could be so selfish and so immoral as to become a squatter in our rental space. However, it’s important for landlords to be skeptical. It may seem safe and simple to rent to a relative or a friend without bothing with things like a background check, but such arrangements can deteriorate pretty fast. In fact, many experts recommend avoiding renting to friends and family.
Instead, you should use an impartial series of checks to ensure that your potential tenant is an upstanding citizen who can afford the apartment — before you rent to them! Don’t worry, you won’t be on your own for this. Plenty of software programs and consulting firms exist just to aid landlords. Landlord software can help you perform an essential tenant credit check as part of your rental application, just as it can help you with advertising your property and posting that rental application in the first place.
You can and should take advantage of tools like these to give yourself the best possible chance of avoiding deadbeat tenants on your rental property. It’s always better to be safe than sorry, so check and recheck before you allow anyone to move into your valuable space.