How do we go about actually making profit from tenants when there are so many tenants out there that give you so much hassle? There are tenants that never pay their rent and break all the rules.
How do we find reliable, high-quality tenants?
My answer – rent your house out to college students. Here are 3 FAQ/Tips below regarding how to get high quality college student tenants.
Tip #1 – How do you ensure that you get tenants that reliably pay rent?
There’s nothing worse than having a tenant not paying rent and you’re forced to go through a lengthy eviction process. The best way to ensure the tenant pays rent is to make sure they can afford the rent. For college students, their parents or their student loans are usually the source of the rent. The last thing a parent wants is for their kid to be evicted during their schooling because they didn’t send rent. On the other hand, if the student takes out school loans, he or she can simply take out a large enough loan to cover the rent.
Tip #2 – How do you ensure that your tenants do not trash your house?
There are several ways to make sure that the tenants don’t trash the house.
One is to make sure you include some professional and graduate students. They have much less time to put up with a roommate who wants to throw a wild party.
The second thing you can do is screen your tenants well. There are many techniques you can use to do this. One is calling up their past landlord and asking them very specific questions about what type of tenant they were. Past behavior is usually a great marker for how they will behave in the future when staying at your property.
The third thing I recommend is having a list of clear rules in your lease. Also make sure you go through the expectations for the tenants before they move in. There are many rules you can set, but one of them could be along the lines of not playing loud music that disturbs the neighbors or other tenants.
Finally, you should be looking for specific behaviors in their interactions with you to find out their level of maturity and responsibility.
Tip #3 – How can I invest in real estate without losing all my money during the next crash?
People are always saying the next crash is coming. When you hear it often enough, you become uncertain and just don’t want to pull the trigger on buying into real estate.
Here’s the thing. When focusing on buy and hold single family home investing, it doesn’t matter if you buy at the high or low end of the market. As long as your rental income exceeds your monthly mortgage payment plus repairs, your holding period is indefinite. Because this point is so important for you to understand, I’ll repeat it. Your holding period is indefinite if your rental income exceeds your mortgage and repair/maintenance costs.
The system is recession proof. If you buy a deal that has positive cash flow right before the market tanks, you simply just wait patiently. You can let your cash flow pay for expenses that arise. You’ll eventually own the house free and clear without having to shell out any extra money from your own pocket into the house. As we have all seen, house prices go back up over time and eventually end up above where they started.