Whatever your management decision, the most important factor in relation to cash flow and return on investment is keeping a property rented

The tenant selection process will vary according to the property and tenant types. But, quite simply, you want to attract and keep the best of tenants.

The fist step in this challenge is to screen all prospective tenants carefully by having theme complete a specific application form. Talk with previous landlords, look into rental history, verify employment, and check all personal and financial references. Some investments real estate owners order credit reports on prospective tenants.

Decide in advance what your tenants review process will be and stick to it. Many inexperienced investors panic when a vacancy occurs. Remember it is much easier to turn down a prospective tenant at the application stage than it is to remove the tenants who are damaging the property or not paying rent.

Once the decision has been made, collect the first months rent in advance plus a sizeable security deposit; usually the equivalent of one month’s rent. This deposit will encourage the tenants to take proper care of the property.

Finally, spell out all the terms and conditions in your lease or rental agreement. In most cases, real estate law requires you to make these agreements in writing. Make certain tenants know their responsibilities as far as rent, late payments, expenses, and maintenance. And make sure you know yours!