A vacant property is every Memphis landlord’s nightmare. A vacant rental property means no income at the end of the month. Filling a rental property is, therefore, key to the success of your rental business.
However, as every landlord in Memphis can attest, finding reliable tenants to fill a rental property isn’t easy. An ideal tenant is one who is keen to follow all rental lease terms, is responsible, and one who is able to pay rent in full.
In this article, we reveal proven ways that teach you how to find tenants for your Memphis rental property.
1. Understand the Tennessee Landlord-Tenant Law
This is the first step that every landlord in Memphis should take. Understand what federal and state laws say as regards renting to tenants. The Federal Fair Housing Act, in particular, makes tenant discrimination illegal.
According to the act, it’s illegal to discriminate against a tenant based on certain protected characteristics. In Tennessee, such characteristics include disability, familial status, race, national origin, sex, and color.
The laws apply to advertisements, and to interviewing and selecting prospective renters.
The following are top fair housing mistakes to avoid:
- Refusing to allow a resident to have a service animal because your community does not accept pets.
- Declining a rental application for any other reason than the prospective resident not meeting your stated qualification criteria.
- Asking a prospective resident, “How many kids do you have?” or “Are you pregnant?”
- Prohibiting children from certain activities, such as stating that “children may not ride bicycles on the sidewalk.”
If you find understanding these laws daunting, consider hiring qualified help. That is, either a competent property management property or a qualified attorney.
2. Advertise Your Memphis Property
To get your Memphis rental property in front of as many faces as possible, you need to advertise it. You can:
- Advertise your property by word of mouth. You can talk to co-workers, family, and friends. This form of property advertising aims to kickstart an exponential referral chain that drives continuous traffic to you.
- Put ‘For Rent’ signs at or near the Memphis property. ‘For Rent’ signs are still popular, even with the internet. It’s one of the easiest, most cost-effective ways to attract interest in your rental property.
- Placing advertisements in the classified sections of local newspapers. This a great option especially if you are also targeting older generations who still rely on print publications.
- Advertising on property listing websites. Examples of rental listing websites include Realtor.com, RentalHouses.com, Hotpads, Zillow, and Craigslist. Listing your rental property on any of these websites is completely free of charge.
To get maximum results, ensure you provide a factual and concise description of your property. In the ad, make sure you highlight all the positive features your property has. For instance, “new stainless steel appliances” or “large fenced-in yard”.
Also, don’t forget to include details such as the move-in costs, and the number of bedrooms and baths.
3. Hire a Real Estate Agent or Property Manager
Marketing, fielding calls, and trying to screen prospective tenants on your own isn’t an easy walk in the park. You could hire a licensed Memphis real estate agent or property manager to help you in this regard.
Usually, there is no set fee for this. Generally speaking, though, a typical commission is a month’s rent.
For this commission, the agent will do the property advertisement, take all inquiries, do the property showing, do tenant screening, and finally put a qualified tenant on your property.
Not all real estate agents and property managers are created equal, however. So, you’d want to do your homework before hiring one.
You can also work with the pros and let them help you fill your vacant property or handle the entire process (including dealing with tenants and managing the property).
4. Determine the Right Rental Price
To find the right renters for your Memphis rental property, you need to price your rental accordingly. Charge too little and you might not make ends meet. Charge too much and you might not find a renter.
When determining the rent amount, it pays to consider the following variables:
- Vacancy tolerance. Vacancies can be profitability killers. There are some landlords, though, that can be more tolerant than others.
- Your costs. Obviously, one of the biggest factors you’ll need to consider are your monthly costs. Costs include maintenance expenses, property taxes, insurance and mortgage expenses.
- Amenities and utilities. You’ll also need to consider how you’ll charge for various amenities and utilities.
- The Memphis housing market shifts almost constantly, and you need to know where the economy currently stands.
- Competing prices in the area. Talk to the landlords in the area to determine what’s competitive and what’s fair. You could also use an apartment hunting site or even classified ads like those on Craigslist.
- Historical unit prices. Know what the previous landlord charged for rent if you’ve purchased the rental property. Ask them directly or use real estate websites like Apartment Guide.
5. Set Your Selection Criteria
In order to select the right renter for your Memphis rental property, you need to establish selection criteria. Generally, you want a tenant who is responsible, clean, creditworthy, respectful and is able to pay rent.
By including certain information in your rental application form, you can increase your likelihood of getting such a tenant. The information in the application form can include:
- Contact details
- Social security number
- Current address
- Personal and credit references
- Current employment income and other sources of income
- Contact information for current and past landlords
- Authorization to confirm information and contact references
6. Screen All Potential Tenants
Once you have advertised your rental, the next step is to screen all potential tenants. A thorough screening process includes the following:
- Verification of income. For you to be a successful Memphis landlord, you need a renter who is able to afford your rent. To confirm whether the renter can afford the rent, you need to verify their income by checking with their employer.
- A credit check. You can check the prospective tenant’s creditworthiness at tenant-screening agencies if you have their Social Security number.
- Contacting previous landlords. This will give you important details about the renter. Ask them questions such as: “Can you confirm that the tenant rented from you? Did the tenant pay rent on time? and Did the tenant reasonably take care of the rental property?”
As you can see, finding tenants all boils down to effectively promoting your Memphis rental property. However, not all tenants are created equal. Choosing the right tenant for your property can make all the difference in your investment’s longevity.