Investing in rental properties can be a lucrative venture, but your success as a landlord largely depends on your ability to find the right tenants. Detroit’s real estate market is evolving, and with that comes a unique mix of opportunities and challenges. You can’t just rent to anyone—you need tenants who will take care of your property, pay on time, and stay long-term.
In this article, I’m going to break down exactly how to choose the right tenants for your rental properties in Detroit. I’ll share key strategies, tips, and some common pitfalls to avoid, so you can make sure you’re setting yourself up for a smooth, profitable rental experience. Let’s dive in.
Know Your Ideal Tenant Profile
Before you start screening applicants, you need to define who your ideal tenant is. This is the first step in making sure you’re selecting someone who fits both your property and your goals.
“Success is your duty, obligation, and responsibility.” – Grant Cardone, The 10X Rule
To choose the right tenants, you have to know exactly what you’re looking for. Do you want long-term tenants who’ll treat your property as their own, or are you okay with short-term renters? Are you looking for families, professionals, or students? In Detroit, some neighborhoods may attract a certain demographic, and knowing that can help you attract the right tenants for your rental.
Here are some things to consider:
- Income: Your ideal tenant should have a stable job or a reliable source of income. Look for tenants who earn at least three times the rent amount (this is a standard rule).
- Lifestyle: Will they respect your property and follow the rules? Tenants who live in a neighborhood like Midtown Detroit may be professionals looking for easy access to work, while those in suburban areas might be families looking for space and stability.
- Rental History: Find tenants with a history of paying rent on time and taking care of previous properties.
Set Clear Tenant Screening Criteria
When it comes to tenant screening, you need to have clear, defined criteria. Setting these standards will not only make the process smoother but also help you avoid potential problems down the road. The clearer your expectations, the more smoothly your rental operation will run.
“To succeed in life, you need two things: ignorance and confidence.” – Grant Cardone, The 10X Rule
Be confident in your screening process. Here’s what you should be looking for:
- Credit Check You want to make sure your tenants can afford the rent and won’t leave you in a bad spot. Run a credit check to see their financial history, paying particular attention to late payments, defaults, and overall debt-to-income ratio.
- Background Check A background check is essential to avoid risky tenants. Check for criminal records, particularly violent offenses, and anything that might make them a liability. In Detroit, where neighborhoods can have different levels of safety, it’s essential to make sure your tenants are responsible citizens.
- Eviction History Check if the potential tenants have any past evictions. If they have a history of skipping out on rent, you might want to pass on them. The 10X Rule teaches us to go all in, and that means not settling for tenants who may jeopardize your property or income.
- Income Verification As mentioned before, tenants should be making at least three times the rent. Ask for proof of income, such as pay stubs, bank statements, or tax returns, to ensure they can cover the rent every month.
- References from Previous Landlords Don’t skip this step. Contact previous landlords to get the scoop on how the potential tenant behaved during their rental period. Did they pay on time? Did they maintain the property? Were they respectful to neighbors? Real references will tell you a lot about what you’re getting into.
Conduct a Personal Interview
I know it can feel awkward, but don’t skip the face-to-face interview. Even in a virtual world, talking to prospective tenants gives you a better sense of who they are, how they communicate, and whether they align with your expectations.
“If you’re not first, you’re last.” – Grant Cardone, The 10X
Rule Your first impression matters. Here are some things to discuss:
- Rent Payment Terms: Be clear about when rent is due, how it’s to be paid, and penalties for late payments.
- Lease Agreement: Talk them through your lease agreement, outlining all rules and responsibilities. Make sure you communicate clearly about your expectations, such as maintenance responsibilities, noise restrictions, and rules about pets.
- Move-In Expectations: Discuss when they can move in, any preparations they should make, and what condition the property will be in when they move in.
Look for Long-Term Renters
Over Short-Term Ones You may be tempted to rent to someone who’s willing to pay a higher-than-usual rent, but if they’re only planning to stay a short while, it could lead to vacancy and more turnover costs. Long-term tenants are gold—they provide stability and ensure you don’t have to constantly advertise and re-screen tenants.
“You don’t have a business unless you’re managing it.” – Grant Cardone, Be Obsessed or Be Average
In Detroit’s evolving neighborhoods, such as Corktown and Midtown, you might attract professionals who are looking for stable, long-term housing. Those tenants are typically much more likely to care for your property and renew leases year after year.
Here’s how you can find long-term tenants:
- Look for tenants who plan to stay in the area for work or family reasons.
- Consider offering a discount or incentive for tenants who commit to a longer lease (1-2 years).
Trust Your Gut
At the end of the day, no screening process or checklist will replace your instincts. If something feels off, it probably is. I can’t tell you how many times I’ve felt uneasy about a potential tenant, only to have that gut feeling prove true down the line.
“Don’t listen to the naysayers. The more you listen, the more you’ll lose.” – Grant Cardone, Be Obsessed or Be Average
Trust your gut. If the applicant doesn’t feel like the right fit for your property, don’t hesitate to move on. It’s better to have a vacancy for a few weeks than to deal with bad tenants for months or even years.
Leverage Technology for Tenant Management
Now that you’ve selected your tenants, maintain a good relationship with them using modern property management tools. These tools make communication easier, rent collection more efficient, and maintenance requests more streamlined.
“The more you do, the more you can do.” – Grant Cardone, Be Obsessed or Be Average
Here are some tech tools you should use:
- TenantCloud: A property management software that lets you handle rent payments, lease agreements, and maintenance requests all in one place.
- Buildium: This tool is great for landlords who want to automate rent collection, track tenants’ history, and run reports on your rental properties.
These platforms make managing your property as easy as possible, ensuring that both you and your tenants are on the same page.
Communicate Expectations Clearly and Professionally
Lastly, it’s crucial to set the tone for your relationship with your tenants early on. Good communication is key to a successful and profitable landlord-tenant relationship.
From day one, set clear boundaries and expectations. Be firm but fair, and make sure you follow through on everything you say. When tenants know that you’re reliable and expect the same from them, it builds mutual respect.
Why It’s Essential:
“Don’t let anyone outwork you. It’s simple: Work harder than the competition, and success is yours.” – Grant Cardone, The 10X Rule
Remember, the better you treat your tenants and communicate with them, the better the odds that they’ll stay longer, pay on time, and take care of your property.
Conclusion:
Be Relentless in Finding the Right Tenants Choosing the right tenants isn’t a one-size-fits-all process, especially in Detroit, where the rental market is in constant flux. But when you’re intentional about who you rent to, you set yourself up for long-term success. Follow the strategies outlined here, trust your instincts, and never settle for average tenants. Take massive action in your tenant search, and you’ll create the foundation for a smooth, profitable rental business.
“You can’t get rich being average.” – Grant Cardone, The 10X Rule
Now get out there and start finding the right tenants. Your rental properties will thrive, your bottom line will grow, and you’ll build a legacy of success in Detroit’s real estate market.
