When researching ways to make extra side income, you probably came across real estate investments as a viable option. Buying a property and renting it to tenants is a great way to build equity in a long-term investment while generating a little side income each month.
If you’ve never been an investor or spent time in the realm of rental properties, you’ll want to start with some basic research. Two important things to learn about immediately are rental applications, often called a rental apps, and lease agreements. They both play key parts in finding and keeping tenants.
The Rental Application
When a tenant responds to an advertisement for a rental property, diligent landlords have them fill out a rental application. This is not a requirement, but it does help you weed out the good tenants from the troublemakers.
A rental app is a form that requests pertinent information about the potential tenant’s background, particularly their financial and rental history. You could create an application yourself or use a free rental application online, which is the preferred method of the modern landlord. The application asks for highly sensitive information, including tax identification numbers, former addresses, monthly income, and the credit score.
After a potential tenant fills out the application, you are not legally bound to offer them the property. It’s simply a form that helps you to evaluate whether or not they meet the eligibility requirements necessary to live on your property.
Savvy landlords will also run a background check and/or a credit check to determine whether the people have serious stains in their pasts that would make them bad candidates for the rental. You don’t want a tenant who has a history of defaulting on payments or getting into fights — that will simply cause more trouble than it’s …