After getting some experience winning foreclosure auctions in Chicago, it may be advantageous to explore other business models in the real estate business. Flipping properties is not always the most strategic move, in certain economic environments, and rental income may be more attractive. The number one headache with generating rental income is the tenants. Renting property certainly is not a free lunch. Follow these tips to smooth the process.
1. References – Be sure to have applicants submit references from employers and previous landlords. Require at least two or three -- and then actually check their references.
2. Intuition – It is known that human intuitions -- first impressions -- are usually correct. Listen to your gut.
3. Rental Associations – Local landlord associations may offer tips and guidelines of their own. Join one, and then network to build relationships with others in the same business. These associations often also have sample contracts available.
4. If the tenants have pets or smoke, you will replace the carpet when they leave. Do not accept these tenants, or raise the security deposit and rent accordingly.
5. Personality – Ask if the tenants will be easy going and agreeable in case of maintenance emergencies. If a pipe leaks or the furnace needs maintenance in the middle of winter, do they seem like the kind of person to complain a lot, or would they make the best of it?