I got very lucky when I owned my duplex in Somersworth. I worked with the seller (before closing) to select the tenants for the upstairs unit. It made sense to be able to choose these tenants since in a matter of weeks I would be the new owner/landlord. The downstairs tenants were simply horrible people and the seller needed to involve the sheriff to have them evicted. That delayed the whole process and taught me a valuable lesson about screening one's tenants! Perhaps I can share a few tips and save you from the same frustration (and clean-up)!
I'm currently in the process of hiring two people for my company. If you are in the same boat, you know how frustrating and difficult it is right now to find intelligent, conscientious people to help your business grow. One thing I have learned in the last week is to stop ignoring my gut. Apparently it knows more than I previously thought. I had second thoughts about one person, but out of impatience I moved forward anyway (on Friday of last week). I relieved her of her position on Monday. I should have listened to the grumbling.
The first thing I encourage folks to do (and at this point this goes for employees and tenants alike!) is to "pre-screen" them. You have their name and (likely) email address. Get your inner sleuth on and find them online. This sounds creepy, but it is "social" media and you are trying to get an idea about this person's social life. If you are single and dating, I would bet my bottom dollar that you have searched out that new interest online before ever meeting them for drinks. It is a great way to see if they appear to be worth your time (or your rental unit). You won't learn everything, but you will get a good thumbnail sketch.
The person that I mentioned above that worked literally two hours for me was a contractor. The employment laws with that sort of relationship are far more casual than those of an actual employee. As a landlord, you do need to be careful about screening/renting laws. "Screening laws were put in place to prevent discrimination of any kind for housing situations," said Badger Realty agent Peter Pietz. "In general, if you use the same screening process and criteria for every person who expresses interest in the property, you will be safe (and simply a good person)!"
Beyond "creeping" on them online (hey, we all do it!) I recommend you require an application for all prospective tenants. Heck, when I was in high school, a family friend came up with an application for any prospective girlfriends I may be interested in. (Of course, I never actually used it.) The tenant application should include details such as rental history, personal references and financial/employment history. There are loads of free ones you can get online. When I was screening for tenants, I called the employer and maybe one of the personal references. I could have done more, but both came back with glowing reviews and I also had an overall good feeling about them. This will provide an excellent baseline from which the tenant can continue to build their good reputation.
My tenants were great, clean, respectful, and generally just a great family to have living upstairs. They did pay late, mostly a week or so, but they always did pay (eventually). If you are concerned (rightfully so) about getting paid, I encourage you to spend the extra cash and do a credit check. You can learn a lot about someone (and their payment history) with that information. Signing a year-long lease is a big deal and if you're like me, that rent check is paying the mortgage. Treat it like the extra source of income that it is and get a little warm and fuzzy that they have a solid history of paying their bills.
The interview is a critical component of both positions I'm hiring for. One of them is going to become the front-facing side of my business. They will be interacting with my clients. For me, this is the first time in our 10 year history that someone else will be taking on that role so I am taking this quite seriously. In your interview with your prospective tenant, you will learn a lot about how they present themselves and how they speak about other people (including employers and landlords). I think those two things represent a lot about the person's character. You are not interviewing them for a job where you will be working with them 40 hours a week. But as the person living in (and presumably taking care of) your home, you want to get a good feel for the kind of person they are.
As I have said in the past, owning a rental property was one of the best things I have done and something I am excited about doing again. There are countless horror stories about bad tenants, but there are far more awesome stories about great tenants and success stories from landlords. I encourage you to explore your options for rental properties and see if it is an option for you. And be sure to do your due diligence with your prospective tenants. You'll be glad you did.