Practical guide to choosing the right tenant

Oct 14, 2024

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One of the biggest challenges for a property owner is finding a reliable tenant who will pay rent on time, take care of your property, and abide by community living rules.

Choosing the right tenant is essential to ensuring smooth property management and avoiding inconveniences such as unpaid rent or damages.

But how do you go about selecting the right candidate? This practical guide offers key advice to help you choose the ideal tenant and ensure a hassle-free rental experience.

The Importance of choosing your tenant well

Choosing a tenant should not be taken lightly. A good tenant contributes to the profitability of your investment by ensuring regular payment of rent and taking care of the dwelling. Conversely, a bad choice can lead to complications, additional costs (repairs, disputes), and financial losses.

Minimize financial risks

The main risk associated with renting is non-payment of rent. An unreliable tenant can jeopardize the financial stability of the owner, especially if it is a rental investment with an ongoing mortgage.

Proper screening of tenants minimizes this risk by ensuring the tenant has sufficient resources to meet their commitments.

Preserve the condition of your property

A respectful tenant will maintain the property and report any issues or necessary repairs. This will save you costly renovation fees at the end of the lease and preserve the value of your property.

Analyze financial criteria

Financial criteria are often the first indicator in evaluating a tenant. Ensure that the tenant has the means to pay the rent regularly.

Check income

The tenant's level of income should be sufficient to cover rent and charges. Generally, it is recommended that rent should represent about 30% of the tenant's monthly income.

If the rent is 5,000 MAD per month, the tenant should justify an income of at least 15,000 MAD monthly.

Request financial documents

To ensure the tenant's ability to pay, request proof of income, such as:

• The last three months' pay slips
• The employment contract or a certificate of employment
• Tax or bank statements for self-employed workers

If the tenant is a student or a young professional, ask for a parental guarantee to protect against non-payment risks.

Verify the candidate's reliability

Besides financial criteria, it is important to verify the candidate's seriousness and reliability. A good tenant should be stable and adhere to rental rules.

Inquire about rental history

A tenant who has previously rented a property can provide references from past landlords. These references will let you know if they respected the lease terms (timely payment, proper maintenance of the property).

Don't hesitate to contact the former landlord for direct feedback on the tenant's behavior and their way of managing the rental.

Evaluate professional stability

Professional stability is a guarantee of financial security. A candidate with a permanent contract (CDI) or stable employment generally offers more guarantees than a worker on a fixed-term contract or a freelance.

If the tenant is on a fixed-term contract or self-employed, you can ask for a rent arrears guarantee, or require a larger security deposit to compensate for uncertainties.

Conduct a solvency check

It is important to verify the solvency of the candidate to avoid unpleasant surprises after signing the contract.

Consult a solvency file

In Morocco, there are solvency file consultation services that allow you to know if a candidate has debts or has already been in arrears. If this option is available, it can give you a precise idea of the tenant's financial reliability.

Check legal background

In some cases, it may be wise to inquire about the candidate's legal background to ensure that he has not had disputes with former landlords or has no unpaid rental debts.

Evaluate the personal profile

The tenant's personal profile is just as important as their finances. You must ensure that the tenant will be respectful of the premises and neighbors.

Know the tenant's lifestyle

Ask questions about the applicant's lifestyle. Is he a smoker? Does he have pets? Do you plan to sublet your property? These details can have a direct impact on the condition of your property and the relationship with neighbors.

Set clear rules in the contract regarding smoking, pets, or specific uses of the property.

Check compatibility with the neighborhood

If your accommodation is in a building or residence, it is essential that the tenant respects the rules of community living. A noisy or disrespectful tenant can create tensions with neighbors and, consequently, complicate the management of your property.

Use a human approach in selection

The landlord-tenant relationship is also a matter of feeling. Even if a candidate presents all the financial guarantees, it is important to feel a good connection during interactions.

Ask open questions

During interviews with candidates, ask open questions to understand their motivations and vision of renting. For example:

• Why are you looking to move?
• How long do you plan to stay in this accommodation?
• What are your expectations regarding the relationship with the landlord?

These questions can help you identify the tenant's real needs and assess if they fit your management style.

Foster a climate of trust

A tenant who feels confident will be more comfortable and respect the rented property more. Show yourself available and ready to answer all the tenant's questions concerning the contract, charges, or maintenance of the accommodation.

Formalize the selection process

Once you have found the right candidate, it is crucial to formalize the rental process to avoid any misunderstanding.

Draft a clear rental agreement

A well-drafted rental contract is the key to hassle-free rental management. Ensure that the contract details all important aspects, such as:

• The amount of rent and charges
• The duration of the lease
• The termination conditions
• The obligations of the tenant and the landlord

Have an inventory of fixtures signed at the handover of the keys, to protect your rights and those of the tenant in case of a dispute.

Require a security deposit

The security deposit (often equivalent to one or two months' rent) protects against potential damages or unpaid rents. Make no exceptions to this rule, even for a trustworthy tenant.

Conclusion: Choosing the right tenant for smooth management

Choosing the right tenant is a crucial step to ensure the profitability and peace of mind of your real estate investment.

By following these practical tips—from checking financial criteria to evaluating personal profiles—you will reduce the risks of disputes or defaulting tenants.

Take the time to analyze each candidate and establish a relationship of trust from the start, so that your rental runs under the best conditions.

Want more advice on managing your real estate rental effectively? Explore our articles and resources on Housing Place and learn how to optimize your rental investments.