Your investment property in Prescott is ready. It has a fresh coat of paint, new carpeting and everything is in working order. The rental looks better than most of the properties listed for rent in the online classifieds, and you’re excited about starting over with a new tenant. The phone rings immediately and most of the callers want to move in ASAP, sight unseen. Now the pressure is on to show the property and the tenants want to move in before the utilities are switched to their name. Let’s look at a few of the tenants together. Far West Realty in Prescott has a little experience to share in a situation like this.
Based on what the current market will bear, let’s say a fair price for your rental should be $1000.00 per month. Your first candidates have a monthly gross income of $3200.00, they have a credit score of 605, and they have other obligations totaling $1063.00. According to their past and current landlords, in the last three years they have been late 8 times with their rent and didn’t get their security deposit returned. Even though this couple feels offended when you turn them down, you move on and screen three more.
The best candidate has a 612 credit score and has little work history; she’s been with her current employer only 7 months. She’s making about $3300.00 per month, and until now she’s lived with her parents. At this point you’re anxious about getting cash flow. Should you take a risk, but do you want to?
You decide to wait a little longer and two weeks later the property has been shown to several more prospects. None of them have screened well and you still don’t have the cash flow you’d hoped for. Now the stress is on you. Should you have taken that first candidate? How long will it take to find a good tenant and can you wait any longer?
While most candidates who come along are not going to meet your standards, someone probably will. Is it better to settle for the best prospect you find, whether or not the prospect is actually qualified for the property?
• It’s important to set some standards ahead of time.
• What do you want to accomplish with your investment?
• Which nightmares do you want to avoid?
• What is the minimum income required to easily make the rent payments?
• What is the highest debt-to-income ratio that would allow that?
• How much rental history do you need?
• What is your set of criteria for measuring how trustworthy and responsible the tenants will be?
• Which types of other references do you need?
• Will you require a criminal background check?
Far West Property Management would like to remind you to set your standards and stay with them. Don’t allow a set of circumstances whether they are yours or your prospective tenants to sway your decision. Find someone who meets your standards, even if you are forfeiting a month or two in income. Be patient! It will pay off in the end. If you don’t have that type of patience, you can always call Far West Property Management to handle these situations for you. Call 928-772-9400and find out how they can make renting hassle free.