29 Mar Finding Renters: Avoid the Horror Stories
Many people choose not to rent out their property here in Seward because they are scared about finding renters and getting a bad one. In our line of work as property managers, we have heard several of these horror stories. Often, if the landlord had just followed through with these three steps, they would have had a completely different and positive rental experience.
Run a Background Check
One of the most important things you can do when finding renters is to follow through with running a background check. You would be surprised what people don’t tell you up front, and what they assume that you won’t find. A background check should at a minimum include a credit check, a criminal check, and calling past references. Viewing someone’s detailed credit report gives you a good idea of their sense of responsibility when it comes to paying their bills, which can also translate to their ability to pay rent on time.
Likewise, a criminal check lets you know if there is anything major that you need to be aware of. This can be especially important when you are looking at placing a renter into an apartment situation or even on your own property. If the applicant is someone who has been in Alaska for some time we will run them through Alaska Court View in addition to our standard criminal check.
Lastly, you have to call their references. Most landlords skip because this part they assume that renters will only write down references that would say good things about them. That is surprisingly not the case. We often get our most useful information (good or bad) when we call people’s references.
Collect a Deposit
Based on the outcome of the full background check, we determine how much of a deposit is necessary to take. Generally we only collect a deposit equal to one month’s rent. So if the rent is $1000, the deposit would be $1000. However, if someone has bad credit history we do require a double deposit of $2000 up front. Occasionally we will make an exception and accept the double deposit payment over the course of a few months if we are reasonably sure, after our in-depth background check, that they will follow through with making the necessary payments. A deposit is an important part of accepting a renter and should be collected before letting the renter move in. By paying a deposit, a renter feels that they have a reason to treat the rental property with more care in hopes of having the deposit returned at the end of their rental period.
Sign a Lease
I cannot count the number of times I have received a phone call from someone who is not my client, and needs to have something sorted out for them about their rental arrangement. Often times the rental arrangements that are causing an argument between a renter and a landlord are not even in writing! In that instance there is not a whole lot that I can do to help sort out the issue because both sides usually have a different story. All the details of a rental situation should be clearly detailed in a written lease that is signed before the renter moves in. A written lease is not only for the landlord’s sake but also for the renter. A good lease protects both parties and keeps everyone aware of what their responsibilities are to one another, from move in to move out. The lease we use for our clients is specific to the State of Alaska Landlord and Tenant Act. As a landlord you should be aware of the AK specific statutes so that everything in your lease is legal and enforceable.
Seward, Alaska has a strong rental market where there is usually a lot more demand than supply. This means that as a landlord you often have the opportunity to choose your renters from a variety of applicants. Of course, finding renters is always a risk regardless of how thorough you are, but these steps are all a part of a landlord’s risk management. By running a background check, collecting a deposit, and getting a lease signed, you should be able to confidently choose a renter and even enjoy the experience of being a landlord.