Both single-family rentals (SFRs) and multifamily homes had occupancy rates of about 95% in the third quarter of 2021, according to Arbor Realty Trust. While a high occupancy rate is a signal of strong demand for rental property, that doesn’t mean tenants always stay in one place.
Finding good tenants is a routine part of investing in real estate. Renting to a good tenant can lead to more consistent rental income, a lower vacancy rate, and more manageable operating expenses.
In this article, we’ll discuss 10 ways to find good tenants, along with tips for screening prospective tenants.
- Renting to a good tenant may lead to more reliable cash flow, fewer expenses due to tenant damage, and higher occupancy when a good tenant renews the lease.
- Some of the best ways for finding a tenant online include reviewing rental listing websites, searching on social media, and creating a free property website.
- Traditional offline methods are also effective for finding good tenants, including posting a “For Rent” sign, holding an open house, and word of mouth.
- Screening tips include setting minimum acceptable standards, running a credit report and background check, and interviewing a prospective tenant in person.
10 ways to find good tenants
Even though the demand for rental property is strong in most markets across the country, it’s still important for a landlord to take the time to find good potential tenants. Here are 10 ways to find good tenants quickly, including many options that are free.
1. Word of mouth
Word-of-mouth (WOM) advertising is the cheapest and arguably one of the most effective ways to find a great tenant. As Entrepreneur notes, word of mouth is also “one of the most credible forms of advertising because a person puts their reputation on the line every time they make a recommendation.”
An existing tenant—or literally anyone in an investor’s sphere of influence—could be a good source for finding a new tenant. Let your contacts know the home is available, and consider paying a small referral fee or giving a gift if the referred prospective tenant goes through screening and signs a lease agreement.
2. “For Rent” sign
Putting up a “For Rent” sign can be another effective and inexpensive way to find a good tenant. Prospective tenants driving around the neighborhood already know where they want to live, what the going rents are, and how hard it can be to find a good home in the area.
Office supply and hardware stores usually sell “For Rent” signs. However, it may be worth the time and money to spend a few extra dollars and order a more professional looking sign online or from the local real estate supply store. A professional sign sends a message to a prospective tenant that a landlord is a serious businessperson, and more durable signs can be saved for future use or used with other rentals.
3. Online rental listing
Most online rental listing websites for advertising a vacant property are free for a landlord to use, adhere to state and federal fair housing laws, and may reach hundreds of thousands of viewers each month. Many sites work with a smartphone app, making them an ideal option for reaching Gen Z and Millennials—2 key renter demographic groups.
Six of the best online rental listing websites for 2022 are:
- Zillow Rental Manager
4. Open house
Real estate agents hold open houses all the time when a property is for sale, so there’s no reason a landlord or property manager can’t hold an open house. An open house can be a good way to meet prospective tenants face to face, answer questions about the home and neighborhood, and conduct some initial tenant prescreening.
Many landlords put together a flyer for the home with important information, such as property description, monthly rent and deposit requirements, required total tenant income and rent-to-income ratio, and whether or not the property is pet-friendly. Include a link to the rental listing website being used, and let the prospective tenant know if they will need to pay a fee to apply online.
Craigslist is an electronic version of a community bulletin board and also can be an effective way of generating leads for good tenants. There are steps to follow to advertise a vacant rental property on Craigslist, according to a recent post from Fit Small Business:
- Create a Craigslist account.
- Choose a location and category.
- Agree to the real estate posting guidelines on Craigslist.
- Add listing information, high-quality photos, and location (address or cross street).
- Review and publish your listing.
- Keep track of the leads received by phone or email for easy follow-up.
- Repost the ad if needed.
In some markets, Craigslist charges a small fee for each advertisement, while in others, advertising is free.
6. Social media
About 70% of Americans use social media, especially people in the key renter age group of 18 to 49. According to the data info and rental listing website Zumper, there are several ways landlords can use social media, including:
- Advertising a home for rent on places like Facebook Marketplace
- Screening prospective tenants online
- Maintaining renter relationships after move-in
7. Print advertising
Some common offline ways to find good tenants include local community newspapers, bulletin boards at the grocery store or church, and printed one-page flyers to announce a home for rent. Flyer templates can be found online from websites like Adobe, Pinterest, or Template.net.
The online rental listing service Avail offers these tips for writing a winning rental listing:
- Begin with the best feature, such as a prime location or big backyard.
- Include the best feature and basics in the headline: “Charming 3 bed/2 bath in Streeterville.”
- Be doubly sure to mention the neighborhood.
- Provide important information on the rental, such as number of rooms, rent and security deposit, amenities, and whether the home is pet-friendly.
- Include multiple ways a prospective tenant can get in touch, such as phone, email, or a property website.
8. Real estate agent
Some investor-friendly real estate agents specialize in finding tenants for landlords. Either the landlord or tenant will pay a commission to an agent, depending on local market customs, and fees will vary by location.
Methods for finding a real estate agent who works with tenants include searching websites like Realtor.com or Zillow to find places for rent listed by an agent, asking for referrals, or reaching out to active real estate brokerages in the area.
9. Property manager
Many property management companies also have an in-house leasing team and may be willing to help even when a property is self-managed. As a rule of thumb, à la carte leasing fees may equal one month of rent, although charges will vary from company to company and place to place.
Good property managers also understand how to set a fair market rent to get a home rented quickly, highlight features tenants are looking for, and identify red flags that may indicate a problem tenant. The best property management companies also provide full-service management, ideal for both local or remote real estate investors who prefer to let someone else deal with tenants and take care of the property.
10. Property website
Some of the top website builders for real estate property websites include Weebly, Wix, and WordPress.org. Many provide a personal domain name, branded email address, search engine optimization (SEO) to drive traffic to the site, a mobile-optimized version, and templates to make setting up a professional website for an available rental property quick and easy.
Tips for screening tenants
Getting leads on prospective tenants is only part of what it takes to find good tenants. Choosing the wrong tenant could end up being a costly mistake, while finding a good tenant may result in a lease that’s renewed year after year.
The online tenant screening service Apartment List offers tips for screening tenants to find responsible renters:
- Set standards such as income level, credit score, previous landlord and employer references, and eviction history.
- Require a tenant application that includes sections for employment status, household income, monthly debt payments, household size, number of pets, and personal references.
- Run a credit check and a background report, making sure to comply with the Fair Credit Reporting Act (FCRA).
- Contact references to verify the information provided on the application is true and correct, such as employment status, job security, and whether a previous landlord would rent to the tenant again.
- Interview the tenant in person with questions including whether the tenant smokes, how frequently they have overnight guests, and whether the tenant plans on having a roommate.
There’s strong demand for rental property in most markets across the country. While finding prospective tenants to apply may not be too challenging, it’s important for landlords to take the time to find good tenants to avoid problems down the road. A tenant who pays on time and takes good care of a home can lead to a healthier cash flow and a bigger return on investment.