Buying property to rent out is a good investment and over time this investment can offer good rewards. With this type of investment comes specific risks which need to be taken into consideration.
Anyone purchasing a property as an investment with the idea of renting it out to pay for their mortgage while getting their foot on the property ladder, needs to weigh up the risks and take the necessary steps to ensure they hand their keys over to someone who is honest and trustworthy.
When renting out a property you will meet many potential renters, each one should complete an application form, giving you all the relevant information needed, along with previous landlords and references.
Don’t take the potential renter on face value. There are so many people that look trustworthy and yet, will run in the middle of the night because they don’t have the money to pay the rental each month. This leaves you in serious financial trouble and having to come up with the money to pay the mortgage until you find another tenant.
Tenant screening is a necessity, it eliminates risk and gives you peace of mind. This type of reporting does checks on your potential renter. It checks the information they have provided is accurate and enables you to see who told the truth when you met them face to face.
Always take the time to follow up on references. Don’t think because the tenant screening gave you the green light you are ready to go. Always combine this reporting service with a follow up on previous landlords to ensure that the potential renters tick all of your boxes.
When you rent out an investment property, you want to know that you are handing your keys to someone who is honest and trustworthy. You want the peace of mind that they will keep your property in the best possible condition. This is impossible to know without following up on references.
The tenant screening report can also assist when it comes to the references. You may be given an address on the report which the tenant didn’t advise you about. Its worthwhile checking up on this before handing over keys and signing a rental agreement. The tenant may have left this address off their application for a good reason and by giving them access to your asset, you deserve to know this reason.
It’s essential that you always look at your property as an investment, as a business transaction. Even if you personally know the people wanting to rent the property, be sure to do the relevant tenant screening, again reducing your risk.
Unfortunately so many people will rent a property without having the funds to pay the rental amount. If they don’t have a good credit score and have default payments against their name, you will never know until you do the relevant tenant screening reports.
Be aware that when you rent out a property without carrying out tenant screening, you may be facing serious financial risk. A tenant that leaves in the middle of the night without paying rent, you are left out of pocket until you can find a replacement tenant. This can take weeks, if not months.
If you have purchased a property with the intention of renting it out and are looking for the rental income to pay your mortgage, you cannot afford to take any risks when it comes to your tenant selection.
This is why you need to take every step to ensure that when you sign the lease and hand over the keys, you feel completely at ease that you have made the right decision.