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 10 Steps to Becoming a Good Landlord: Choosing Tenants
By: Darin "Sid" Cameron, CRS
Tue, Nov 28th, 2006 4:46 pm

We work with a lot of real estate investors and we're seeing a shift in investing from rehabbing (buy, fix up and flip) to long-term ownership (rental properties).  So over the next few days I'd like to take the time to discuss the most important thing to know about owning rental properties- how to be a good landlord!

How to be a Good Landlord

Owning rental properties can be an excellent way to build wealth over time.  However before you run out and buy property, you need to be aware of the responsibilities that go with it.  It’s not as easy as they make it out to be on late night infomercials.

Make no mistake about it, owning rental properties does involve work and there are risks that go along with the potential rewards.  The most important thing to understand is that you can kiss your profits goodbye and even create huge problems for yourself- financial, legal and otherwise- if you do a bad job as a landlord.

So below is a basic guideline for good rental property management that should help you boost your effectiveness and profitability.

Choosing Your Tenants

Your number one duty as a landlord is to manage the maintenance and use of your investment properties.

This is YOUR investment –YOUR money --  so make sure you really know who is using your property and how your property is being treated.  This process starts by selecting your tenants VERY carefully.

If the property is in the United States, federal law says it’s illegal to discriminate against rental applicants based on race, national origin, religion, marital status, sex or physical disabilities. You can be sued, fined and even go to jail if you do this; SO DON’T DO IT.  Beyond this however, it's still your property and you can pick and choose who you want living there.

The biggest mistake most new landlords make is they rush to find a renter and take the first person that can fog a mirror.  Yes it can be time consuming showing the property.  Yes I do understand vacant properties don’t generate income and that can be an issue when you have a mortgage to pay.  But just like tenants who shop around to find the best home for their money, you should also shop around to find the best tenant for your property.

Step one is to make sure all applicants completely fill out a "Rental Application" form. Don’t just “trust your gut.” Having a completely filled out form not only assures you have complete information on everyone so you can pick the best candidate, but by allowing some renters to slide by while making others go through the process can give the appearance that you might be practicing discrimination!

Rental Application forms can be purchased at office supply stores like OfficeMax and Office Depot or found online.  When using generic forms found online, it might be a good idea to run them past a real estate attorney first just to make sure they’re not violating any local or state housing laws that the author doesn’t know about.

Tomorrow I'll continue with Choosing Your Tenants.

[ Next Article: 10 Steps to Becoming a Good Landlord: Choosing Tenants (Part 2) ]
[ Previous Article: How to Avoid Insurance Claims this Christmas ]

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Darin 'Sid' Cameron, CRS

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Darin "Sid" Cameron spent 15 years working in the technology industry which in 1998 relocated him to St. Louis. In 2004 he took over web development tasks for Kimberly's real estate team and later became the full-time Marketing and Operations Director in 2005. In 2011 Sid launched two brokerages, The Realty Store, Inc. and Realty Referral Partners, Inc, while continuing to perform marketing and operations for Kimberly's team. Sid holds a real estate broker's license in Missouri, CRS certification and was the first CyberStar in the St. Louis area.
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