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The following is a guest post by Dave Ambrose and is geared for those who want to create passive income through rental properties without the headaches associated with finding responsible tenants .
I was at a real estate investment club meeting in 2005 and one of the guys at the table I was sitting at said to me: “Yeah, well I only charge $600 a month because I really don’t want any real tenants”. I knew I was sitting at the wrong table. I can’t tell you how badly that statement grated on my inner businessman. He may as well have said, well I would like to make money, but I don’t want to do any real work.
Over the past 10 years I have gotten a pretty good handle on what it takes to ensure you at least cut the risk of getting bad tenants into your property while at the same time getting real market, rent paying tenants into your property. I call them the five gates and here they are:
Gate 1
Get your tenants online. I’ve seen the results firsthand. The quality of tenant (on average, there are always rare exceptions) is correlated to the media used to speak to that audience. If I advertise in the “Penny Saver” guess who I get? If I advertise in the newspaper I get people who have some pretty good stories and pretty bad credit. If I advertise online I get people who at least know how to operate a computer and more than likely pay an internet bill.
There have been many great sites over the years for advertising apartment rentals. I always got killer results from rent.com but that’s gone now. Currently the best place to advertise is Craigslist. And yes, there is a method you should be following to getting the most out of those ads, but that would be the subject of another post.
Gate 2
Tell the prospective tenant who calls you that you require a hair under 2 month’s security and also there will be a credit check. This will scare off most people who have no intention of paying you throughout a lease term. The key to asking for that amount of security is that If they can come up with that kind of cash to move in, then they know how to manage their money. … [visit site to read more]
