The conversion from primary property to rental property continues to expand in the single-family housing market. As more and more homeowners become landlords there are three “P’s” commonly referred to in order to have a successful investment: Property, People, and Perception. One must have an enticing property in order to attract potential long-term tenants (people) and, subsequently, maintain a positive perception of the property to ensure success.
But there are three additional concepts that lead to a successful and profitable rental arrangement: Persistence, Patience, and Payoff.
1. Persistence. Finding that perfect single-family dwelling can be challenging. Landlords search for well-maintained properties in prime locations that can be easily converted onto the rental market. Even if one is converting an existing property to a rental, there is a high degree of persistence in getting the property into an attractive and desirable rental property.
Another form of persistence is in finding tenants that can provide financial surety to a landlord or property manager’s investment. Subsequently, one of the most important steps in the persistent search for a long-term, financially secure tenant is a thorough tenant background check which should include credit check, criminal history and sexual registry reports, evictions, and personal references.
2. Patience.
“The investment opportunity that single-family rentals offer today is more attractive to investors with patient money – those who have an investment horizon of more than three-to-five years and are focused on making their return on monthly rental income rather than property appreciation…” (1)
Patience can involve the near and long-term. When investing in property one must be prepared to wait for the investment to payoff. But patience involves more than the wait for payoff but the wait for the perfect tenant. Landlords and property managers often feel the pressure to keep units filled and earning income, but a single-family dwelling landlord might wait a little longer as there may be more at stake, certainly if it is only a single property in a portfolio.
3. Payoff. Individuals renting out a single-family dwelling can certainly achieve a stable income. By being persistent in creating a clean and desirable home as well as pursuing potential successful tenants, and utilizing patience in the pursuit of those tenants, a landlord can get to the payoff.
Adam Almeida, President and CEO of TenantScreeningUSA.com states: “Renting out a single-family dwelling can be extraordinarily different but there is certainly a payoff assuming one takes the right steps. One step that should never be skipped or shortchanged is a tenant check.”
10News.com (Mar. 02, 15) highlights some of the key elements included in tenant screening:
You don’t want just anyone renting from you. It’s important to take the time to create an application with the basics like full name, employer, salary, any previous rentals and landlords in addition to references. You will also need prospective tenants’ Social Security numbers to conduct a background check and get their authorization to run a credit check. (2)
A tenant check remains an integral part in vetting a potential long-term tenant.
- Persistence in conducting thorough tenant checks
- Patience in not jumping at the first tenant to pass through tenant screening
- Payoff in selecting the most fiscally able individual(s) or family based on interviews and data pulled from a tenant check.
TenantScreeningUSA.com is a third-party tenant screening company that works with landlords and property managers in creating low-cost, thorough tenant screening packages. Persistence and patience are key but the payoff is in having the right information for the right cost in the right amount of time.
Notes:
(1) nreionline.com/single-family-housing/patient-money-enters-single-family-rental-market
(2) 10news.com/financial-fitness/6-tips-for-renting-out-your-home
