If you are a proud owner of a property in the city of Los Angeles and you want to rent it out to make a profit, this article is for you. You have worked hard to earn enough money and buy a real estate in one of LA’s neighborhoods. Now you are looking for tenants who can bring a stable source of income. That’s great! But, be careful who you rent out to, because finding reliable LA tenants is key to collecting your money without issues.
There are so many things that could go wrong if you don’t choose the right tenants. They could be late on rent, they could refuse to move out or they could pack your furniture up and leave the place over night. These are just a few of the possible negative outcomes. We tell you this, not to scare you, but to prepare you for the reality of the situation. To avoid finding yourself in these or similar positions, there’s a list of things you can do to ensure trustworthy people live in your house or apartment.
Advertise your property well
The best solution to finding reliable LA tenants is to notify your family, friends and coworkers that you are renting. If you get a recommendation from your trusted circle of friends, you can be sure your property is in safe hands and that you’ll be paid on time. However, if this doesn’t work for you, you can post an ad on one of many websites, like craigslist.org, apartmentguide.com or zillow.com. To widen your choice, you should offer a competitive price for your unit. If you go 30-100 dollars bellow the competition, you will have more applicants and more options to choose from.
Respect the Law when choosing your LA tenants
Landlords looking for tenants need to respect the Federal Fair Housing Act. The Act protects against discrimination in any housing related activity, be it renting, buying or securing finance for housing. It prohibits discrimination on the basis of race, color, national origin, religion, sex, disability and the presence of children. This means you need to run the same background check on all prospective tenants, and base your decision on other factors than the previously mentioned ones. You also need to respect the rules set by municipalities and fire departments. These determine the number of people who are allowed to legally reside in a house or an apartment, in order to avoid fire hazard. The rule is that no more than two people can reside in a bedroom. So, if you are renting a 3-bedroom apartment, no more than 6 people should live in it.
Ask the right questions
When interviewing potential tenants, you should have a list of questions. Ask everyone the same questions and note down their answers so you can go through them later. These questions should help you form a better picture of your potential renters and writing it down will help you remember all the details. You should ask the following questions:
- Why are you moving and when do you want to move in?
- Will you agree to a background check and credit check?
- What is your monthly income?
- Can you provide references from your previous landlord and/or employer?
- Are you willing to pay a security deposit and the first rent?
- How many people will be living in the house and do you have any pets?
If prospective tenants refuse to agree to a credit check or they can’t provide references from a current employer, that should be a red flag. You want somebody who can pay their rent regularly and on time, so you should avoid tenants with bad credit score, or the ones who won’t have you speak to their boss. Another important question is the number of people. This is regulated by municipality rules, so check them for your property’s specific location. Yet another warning signal is when somebody insists on moving in tomorrow. Respectable tenants know it takes a while to find the right place and they start their search a month in advance.
Do a thorough background check on prospective LA tenants
This is the most important step when choosing your LA tenants. Don’t believe everything they tell you. See if their story checks out by going through their credit reports, criminal background and eviction records. It can be a long process. If for any reason you don’t want to handle it yourself, you can rely on service providers like TransUnion or cozy.com to do a thorough check for you. Both you and your potential tenant need to make profiles on those websites. They need to provide information about their background and then the good people of TransUnion or cozy.com make sure it checks out and let you know the results.
Also, it’s crucial to speak to their previous landlord. And by previous we mean, not the landlord they are leaving, but the one before that. You’ll want to do this because there’s a possibility that their current landlord might lie to you just to get rid of bad tenants. On the other hand, the one before won’t have any interest in lying to you. They will give you an honest feedback.
Take a security deposit
A security deposit is a fee your tenants pay prior to entering your house. Its purpose is to protect you as a landlord from material damage your tenant might make. It’s not obligatory to take a security deposit, but it’s highly advisable. Tenants who refuse to pay this fee are bad news. You shouldn’t let anyone in, without collecting your security deposit. According to California State Law security deposit should exceed two months’ rent if the unit is unfurnished, or three months’ rent if the unit is furnished.
When all is said and done, and you have narrowed down your choice – our last piece of advice is – go with your gut feeling! Trust your internal voice, and don’t give the keys to your house to anyone who doesn’t seem honest.