Your Mom told you, “Pick Your Friends Wisely ..They are a Reflection of You” In real estate the saying goes, “Pick Your Tenants Wisely…They Are a Reflection of Your Income Statement…Your Bread and Butter!
Yup, that’s right. Some people make income from stock dividends (well, maybe not in this market), some people make income from hourly labor. In real estate, property owners make income from rent collected from their tenants.
Rent is “Bread and Butter” to the owner. Rent is what the owner uses to pay the mortgage, property tax and maintain the property. For this reason, if you own property its vitally important for you to pick your tenants wisely.
Sometimes it takes time to find a qualified tenant. It is worth taking the time because once you find a qualified tenant, this tenant will keep your bread and butter – income stream – coming for years!
Some methods for tenant selection are running a credit report on the prospect (with their consent), asking for references from the prospect’s employer and previous landlord (actually calling those references), checking the public records to determine if the tenant has been involved in any criminal activity and getting copies of the tenant’s drivers license and passport and social security number.
Miami, like many international cities, has qualified prospective tenants that do not have social security numbers because they are foreign nationals. To protect your bread-and butter-income stream you may have to use a few more methods. You could check the length of the propect’s visa to make sure the he is allowed to remain in the U.S. for the term of the lease and check her driver’s license to make sure it is valid for the term of the lease.
These checks protect the property owner because its hard to impose a monetary claim against a tenant doesn’t have a social security number and leaves the country. To be extra safe, you could ask that someone with a social security number personally guarantee the lease so if the tenant goes back to his country the Landlord won’t be stuck paying the bills with no means of collection.
Collecting and analyzing the results of the data you ask the prospect to provide allows to you to figure out if the prospect seems like someone who will be able to continue to providing you with your bread-and-butter-income-stream.
Follow me if you’d like to learn more about how to pick your tenants wisely or if you have any questions email them to me!
Think of your income when you hear this song!