Don’t let just anyone into your property. Learn how to select the perfect tenant through referencing.

Many investors think the hardest part of their job is buying the right property. This is only one piece of the puzzle. Without the right tenants, even the best property will drain money, at least until you sell it for capital gain.

Wealth for Life perfect tenant
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If you don’t find good tenants, you won’t be able to rely on your property for a stable source of income. You’ll have volatile cash flow that will never give you peace of mind.

This is why investors go out of their way to advertise their property to the right people. But no matter how well you target your tenants, you can never know who they are unless you meet them.

At that point, you must always ask your tenant to provide references. Skipping this step can conceal facts you need to have if you’re going to invite them to live in your property.

In short, referencing is crucial to finding a good tenant. Here’s why.

1. You Get a Better Idea of Their Financial Standing

The last thing you want is to have a non-paying tenant. It means you’re not going to have a stable cash flow. Good references from your prospective tenant are the best way to make sure this doesn’t happen.

Wealth for Life tenant finances
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You may think simply asking for a credit report is enough. It’s not. A tenant can easily paint the wrong picture by taking steps to improve their credit.

This happened to Ken, a first-time landlord who managed to find a tenant, but failed to reference him. Jack, the tenant, provided a clear credit report and the two of them came to an agreement. 

All well and good, but when Jack gave Ken the check for one month’s rent and deposit, it bounced. Ken called to see what happened, and Jack told him it was just an issue with the bank and he’d send another check. The second check bounced as well.

It turned out that Jack lost his job before moving in and had no intention of paying. Worse yet, he knew how to stay in the property for free. After Ken served him an eviction notice, Jack lawyered up and the case went to court. It took 228 days for the case to get resolved, and Jack stayed in the property for free throughout that time. It wasn’t until the sheriff forcibly removed him after 274 days that he finally left.

Because he didn’t reference his tenant, Ken lost nine months of rent. This illustrates the vital importance of getting complete references and checking them thoroughly. And it’s not the only reason.

2. You Can Unveil Past Criminal Behaviour

Obviously, the vast majority of people who have a criminal record won’t disclose it. They know it’s almost guaranteed to get them rejected. For this reason, you’ll have to dig deeper to see if the tenant has a record.

Wealth for Life criminal tenants
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Taking on tenants who have a history of criminal and antisocial behaviour is never a good idea. You might have to deal with legal complaints and police check-ups on a regular basis. In addition, you’ll probably have to spend a lot of time and money repairing damages.

Not to mention that criminals are likely to draw other shady people to your property. You don’t want your property to get linked to any kind of criminal activity. Not only will this cause a ton of trouble, but you might also have issues renting the place out in the future.

This is why referencing your tenant to see if there’s a criminal past is hugely important. The risk of accidentally inviting a shady tenant into your home is just too high, so avoid it at all costs.

3. You Can Get Direct Opinions from Previous Landlords

A tenant reference should include contact information for past landlords. If your tenant isn’t willing to provide it, they might be hiding something. This is a red flag you should investigate immediately.

Once you have the necessary contact information, you’ll want to get in touch with the previous landlords. Just like an employer would contact a potential hire’s past employers. You should do this to hear their opinion of your prospect. You might find out pertinent pieces of information you wouldn’t be able to get anywhere else.

Wealth for Life tenant past
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When talking to a fellow landlord, make sure to ask the right questions. These include:

  • Were there any issues with the rent payments?
  • Did the tenant cause any kind of damage to the property?
  • Did they disturb the neighbours in any way?
  • Why did the tenant decide to leave?
  • Did you part with the tenant on good terms?

Of course, you’ll come up with other questions specific to your situation, but the ones above are a good start.

4. You Can Understand Their Intentions Better

Trust is the basis of every tenant-landlord relationship. Referencing a tenant gives you a chance to see if they’re worth your trust. You can easily deduce this if you ask a few key questions.

Among other important things, you need to ask the tenant what they plan to do with the property. It’s all too common for a tenant to sublet the property without the landlord’s consent.

This can create numerous issues that can be quite costly to rectify. It means you’ll never know who’s in your property. And you won’t be able to do a background check on them. 

This ties back to making sure you contact the tenant’s previous landlords. They’ll give you all the information you need about how the tenant is likely to handle your property. If you notice anything suspicious, it’s better to move on to another tenant.

5. You Can Set Expectations from the Start

By investigating your tenant’s references, you can see exactly who they are. You can get a good idea if there will be any issues with them in the future. This gives you a chance to be proactive and set some ground rules to make sure everything runs smoothly.

Wealth for Life tenant agreements
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In addition, you can understand what their needs are and see if you can meet all of them. Referencing isn’t just for your security. It also ensures that you and the tenant are on the same page when it comes to the expectations you have of one another.

For example, they might have, or plan on getting, pets. Or they might be students who will be hosting parties every weekend. Referencing gives you a chance to ask the right questions and build a fruitful relationship from the start.

Be Thorough

As you can see, referencing can prevent most tenant issues. It gives you a detailed overview of what you can expect from the tenant. Once you have the reference, you can see if they meet your needs and if they’ll be happy living in your property.

When it comes to referencing, remember to leave no stone unturned. Your tenant can be crucial to you reaching your investment goals. 

And if it takes you more time to find the right tenant, so be it. It’s better to get it right from the get-go than to spend a lot of time and money on damage control.

Of course, this is not an easy decision to make, which is why many investors turn to experts for help. Reach out to us and we can take this burden off your shoulders.

Don’t let just anyone into your property. Learn how to select the perfect tenant through referencing.

Many investors think the hardest part of their job is buying the right property. This is only one piece of the puzzle. Without the right tenants, even the best property will drain money, at least until you sell it for capital gain.

Wealth for Life perfect tenant
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

If you don’t find good tenants, you won’t be able to rely on your property for a stable source of income. You’ll have volatile cash flow that will never give you peace of mind.

This is why investors go out of their way to advertise their property to the right people. But no matter how well you target your tenants, you can never know who they are unless you meet them.

At that point, you must always ask your tenant to provide references. Skipping this step can conceal facts you need to have if you’re going to invite them to live in your property.

In short, referencing is crucial to finding a good tenant. Here’s why.

1. You Get a Better Idea of Their Financial Standing

The last thing you want is to have a non-paying tenant. It means you’re not going to have a stable cash flow. Good references from your prospective tenant are the best way to make sure this doesn’t happen.

Wealth for Life tenant finances
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

You may think simply asking for a credit report is enough. It’s not. A tenant can easily paint the wrong picture by taking steps to improve their credit.

This happened to Ken, a first-time landlord who managed to find a tenant, but failed to reference him. Jack, the tenant, provided a clear credit report and the two of them came to an agreement. 

All well and good, but when Jack gave Ken the check for one month’s rent and deposit, it bounced. Ken called to see what happened, and Jack told him it was just an issue with the bank and he’d send another check. The second check bounced as well.

It turned out that Jack lost his job before moving in and had no intention of paying. Worse yet, he knew how to stay in the property for free. After Ken served him an eviction notice, Jack lawyered up and the case went to court. It took 228 days for the case to get resolved, and Jack stayed in the property for free throughout that time. It wasn’t until the sheriff forcibly removed him after 274 days that he finally left.

Because he didn’t reference his tenant, Ken lost nine months of rent. This illustrates the vital importance of getting complete references and checking them thoroughly. And it’s not the only reason.

2. You Can Unveil Past Criminal Behaviour

Obviously, the vast majority of people who have a criminal record won’t disclose it. They know it’s almost guaranteed to get them rejected. For this reason, you’ll have to dig deeper to see if the tenant has a record.

Wealth for Life criminal tenants
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

Taking on tenants who have a history of criminal and antisocial behaviour is never a good idea. You might have to deal with legal complaints and police check-ups on a regular basis. In addition, you’ll probably have to spend a lot of time and money repairing damages.

Not to mention that criminals are likely to draw other shady people to your property. You don’t want your property to get linked to any kind of criminal activity. Not only will this cause a ton of trouble, but you might also have issues renting the place out in the future.

This is why referencing your tenant to see if there’s a criminal past is hugely important. The risk of accidentally inviting a shady tenant into your home is just too high, so avoid it at all costs.

3. You Can Get Direct Opinions from Previous Landlords

A tenant reference should include contact information for past landlords. If your tenant isn’t willing to provide it, they might be hiding something. This is a red flag you should investigate immediately.

Once you have the necessary contact information, you’ll want to get in touch with the previous landlords. Just like an employer would contact a potential hire’s past employers. You should do this to hear their opinion of your prospect. You might find out pertinent pieces of information you wouldn’t be able to get anywhere else.

Wealth for Life tenant past
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

When talking to a fellow landlord, make sure to ask the right questions. These include:

  • Were there any issues with the rent payments?
  • Did the tenant cause any kind of damage to the property?
  • Did they disturb the neighbours in any way?
  • Why did the tenant decide to leave?
  • Did you part with the tenant on good terms?

Of course, you’ll come up with other questions specific to your situation, but the ones above are a good start.

4. You Can Understand Their Intentions Better

Trust is the basis of every tenant-landlord relationship. Referencing a tenant gives you a chance to see if they’re worth your trust. You can easily deduce this if you ask a few key questions.

Among other important things, you need to ask the tenant what they plan to do with the property. It’s all too common for a tenant to sublet the property without the landlord’s consent.

This can create numerous issues that can be quite costly to rectify. It means you’ll never know who’s in your property. And you won’t be able to do a background check on them. 

This ties back to making sure you contact the tenant’s previous landlords. They’ll give you all the information you need about how the tenant is likely to handle your property. If you notice anything suspicious, it’s better to move on to another tenant.

5. You Can Set Expectations from the Start

By investigating your tenant’s references, you can see exactly who they are. You can get a good idea if there will be any issues with them in the future. This gives you a chance to be proactive and set some ground rules to make sure everything runs smoothly.

Wealth for Life tenant agreements
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn
  • Facebook
  • Twitter
  • Google+
  • Pinterest
  • Gmail
  • LinkedIn

In addition, you can understand what their needs are and see if you can meet all of them. Referencing isn’t just for your security. It also ensures that you and the tenant are on the same page when it comes to the expectations you have of one another.

For example, they might have, or plan on getting, pets. Or they might be students who will be hosting parties every weekend. Referencing gives you a chance to ask the right questions and build a fruitful relationship from the start.

Be Thorough

As you can see, referencing can prevent most tenant issues. It gives you a detailed overview of what you can expect from the tenant. Once you have the reference, you can see if they meet your needs and if they’ll be happy living in your property.

When it comes to referencing, remember to leave no stone unturned. Your tenant can be crucial to you reaching your investment goals. 

And if it takes you more time to find the right tenant, so be it. It’s better to get it right from the get-go than to spend a lot of time and money on damage control.

Of course, this is not an easy decision to make, which is why many investors turn to experts for help. Reach out to us and we can take this burden off your shoulders.

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