Every landlord is looking for the perfect tenant. We want someone who has an excellent credit score, a great rental history, and plenty of income to cover the rent. However, the perfect tenant doesn’t always appear in your pool of applicants. If none of the applicants for your property meet your criteria, you have two options. You can wait and keep looking for a more qualified tenant, or you can work with one of the less qualified people who have already applied.
Of course, every day that the unit sits empty is costing you money. For that reason, sometimes it is in your best interest to choose one of the present options. You might be questioning the wisdom of accepting a less qualified applicant; getting someone into the unit right away is only a better option if that person consistently pays their rent on time for the duration of the lease. Accepting a less qualified applicant is not financially beneficial if that person never pays the rent; you might as well have left the unit empty.
It is important to look at how we define a “less qualified applicant.” This does not mean that you accept any applicant. Any applicant that you select should have a good rental history. However, there may be some other factors that make that particular applicant less desirable than what you had hoped. For example, the applicant may have recently changed jobs. He may have a below-average credit score or a lot of debt.
There are some other positive attributes that can offset these negatives. Look for applicants who have shown themselves to be responsible and reliable. They should answer your calls and emails, confirm appointments, and show up on time for meetings with you. They should be available to move in when your unit is empty. They should be enthusiastic about moving into your property and willing to abide by the terms and rules of your lease.
The most important thing to remember when you are considering accepting a less qualified applicant is that you, the landlord, must transfer the risk. Do not take on the extra risk personally in order to fill the unit; mitigate your risk by transferring it back to the applicant. There are several ways to do this, including the following:
Charge a higher security deposit. Depending on what the law in your state allows, charge a higher security deposit. This way, if the tenant doesn’t pay the rent, you have extra security to cover you while the unit is vacant. Arizona Landlord Tenant Law allows for only 1 and 1/2 months security deposit.
Require the tenant to make automatic online payments. Don’t wait for the check to come in the mail. Have the tenant set up recurring electronic payments so that you get paid automatically every month.
Ask for a co-signer who has better income and credit qualifications. If your tenant doesn’t pay the rent, the co-signer must pay it.
Require a lump sum payment for short-term leases. If the tenant doesn’t have great qualifications but is looking for a short-term lease, require them to pay the total rent for the duration of the lease before moving in. This is sometimes an option for students who don’t have much income, but who are being financially supported by parents.
If none of your rental applicants have stellar qualifications, don’t give up. You can work with less qualified applicants without putting yourself at major risk. Get in touch with McMath Realty. We provide rental property management services to take the stress out of being a landlord.
Contact McMath Realty to learn more today https://mcmathrealty.com//contact.php.