Knowing your tenants is the number one rule for any would be landlord out there. If you are considering renting your house or flat out to a complete stranger then there are a few things that you need to do before your proceed. Ideally the first thing that you should do is invest in the services of a property management agent as they are experts in all the legal aspects of renting out a property as well as many practical matters as well. You might think that this is an unnecessary expense but in the long term you might end up paying out more due to errors and hidden unexpected costs or fines.
It takes a lot of work to make sure that a house is suitable for tenants with regards health and safety but once you are sure that you have covered all aspects of the property the next step would to be fine the right tenant. This is a task that you should take some time over and really consider your candidates before making an agreement with one specific person. If you employ the services of a property manager you will have some comeback on the tenant if they are causing problems such as non payment of rent or anti social behaviour. However if you undertake to rent out your property without assistance this problem is wholly your problem. The main problem with this is the stress and worry that it can cause as you are personally involved and not mediating through a third person such as a property manager.
Your property and its location will primarily determine what type of tenant you will be able to attract. For example a family will not be interested in renting a one bedroom flat and a group of university students are less likely to want a large farmhouse in the country. However, whatever tenant you select for your property, one thing is certain and that they need to be honest and reliable with regards paying you the agreed monthly rental. As a landlord it is essential that you spend some time assessing the history of your potential tenant before you sign any binding contracts. For example, do they have any references from previous landlords and if so you should speak directly to that person to get additional reassurance that the proposed tenant is who they claim to be and that they have not had any problems with the tenant.
You can hire a property manager to carry out a tenant referencing service which could let you know if they have had any problems with debts, their income to rent ratio and whether they have had any bad credit history which might be of concern. Finally, if you are in any doubt about your tenant then you might want to consider taking out insurance called Rent Guarantee which you can use to cover the rent in the event of a tenant failing to make a payment, some policies also cover legal costs to reclaim outstanding payments.