Allowing just anyone to rent your investment property can be a costly mistake. Here are five reasons why you should vet your prospective tenants carefully.

5 Reasons You Should Vet Your Prospective Tenants

Check out the top five reasons you should always vet prospective tenants – or hire a property manager to do it for you:

  1. You don’t want to run into pay problems
  2. You want to ensure you’re renting to someone who isn’t going to trash your house
  3. You’re looking out for other tenants
  4. You want to find people who will stay for the long haul
  5. You want to avoid future evictions

Here’s a closer look at each.

Reason #1 to Carefully Vet Tenants: You Don’t Want to Run Into Pay Problems

One of the biggest hassles – and potential problems – associated with renting out an investment property is collecting rent each month. If you don’t have a tenant who pays on time, it can cause all sorts of other issues down the road.

You may end up having to evict the tenant, which is costly and time-consuming. Or, if you’re not able to collect rent for several months, it could put you in a difficult financial position.

This is why it’s so important to carefully vet prospective tenants and make sure they have a good rental history. You can check their credit score and rental history to get an idea of whether or not they’re likely to pay on time.

Reason #2 to Carefully Vet Tenants: You Want to Ensure You’re Renting to Someone Who Isn’t Going to Trash Your House

Another reason to carefully vet your prospective tenants is that you want to make sure they’re not going to trash your house.

You don’t want someone who’s going to damage the property or leave it in a state of disrepair. This can end up costing you a lot of money in repairs – and it can also make it difficult to find new tenants when it’s time to re-rent the property.

To avoid this, be sure to check references and do a background check on prospective tenants. This will give you a better idea of whether or not they’re likely to take good care of your property.

Related: How to get into investing in multifamily properties

Reason #3 to Carefully Vet Tenants: You’re Looking Out for Other Tenants

Carefully vetting your prospective tenants is not just about protecting your own interests – it’s also about protecting the interests of other tenants.

If you live in a multi-unit building, for example, you don’t want to rent to someone who’s likely to cause problems for the other tenants. This could lead to complaints and even legal action.

So, it’s important to consider the impact your prospective tenants will have on the other people who live in the building. Again, checking references and doing a background check can help you determine whether or not they’re likely to be a good fit.

Reason #4 to Carefully Vet Tenants: You Want to Find People Who Will Stay for the Long Haul

Another reason to carefully vet your prospective tenants is that you want to find people who are likely to stay for the long haul.

It’s always best when tenants stay in a rental property for several years at a time. This stability can make it easier for you to budget and plan for the future. It can also help you avoid the hassle and expense of finding new tenants every year.

Related: Should you flip a property or rent it to a tenant?

Reason #5 to Carefully Vet Tenants: You Want to Avoid Future Evictions

Finally, one of the best reasons to carefully vet your prospective tenants is that it can help you avoid future evictions. If you do a good job of screening tenants upfront, you’re less likely to have problems down the road. This can save you a lot of time, money, and hassle in the long run.

The bottom line is that carefully vetting your prospective tenants is always a good idea. It’s the best way to protect your investment property – and to avoid problems down the road.

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