This is the perfect tenant for those who rent professionally - Perfect tenant profile rent professionally revealed 2021 - The average profitability of a house for rent in Spain in 2019 is 10.7% of which 3.9% come through rent and the rest is by the revaluation of the flat itself. Among the key factors to determine what you earn by renting the house there is above the rest: to whom you rent the house. And if the tenant does not pay, the rest will not matter.

That's why knowing who you rent the house to is crucial if you don't want to avoid problems. At this point, “each investor prefers a type of tenant,” explains Carlos Galán, author of the book Independízate de Papa Estado (on long-term investment) and creator of Libertad Inmobiliaria (on real estate investment). The apartment itself will also determine the tenant, since “an attic of 40 m2 is not rented to the same tenant as a three-room house.

Beyond the house, there is one key characteristic of the tenant that all landlords agree on: their ability to pay. From Alquiler Profesional they explain that "the main thing, without a doubt, is solvency"” In his view, " any aspect that negatively affects the solvency of the tenant should be a very important red line, especially if the collection of rent is not guaranteed in some way”.

Perfect tenant profile rent professionally revealed 2021

Carlos Galán analyzes this ability to pay with a simple measure " dedicate a maximum of 35% of your income to rent” so that they can pay without problem. To this he adds other characteristics such as his job stability. All this information can be obtained by asking the last payrolls of the tenant or the income statement of the last year and his working life.

Richard_IFI, a private investor that rents since 2006 and has been increasing its real estate portfolio to 4 homes, has a different but very effective approach. It also studies the solvency of tenants, but adds one more element, diversification. For that reason “ " in my case, more than 4 characteristics, what I look for are 3 or 4 tenants depending on the size of the house”.

” As in all investment issues, you have to diversify, and in this sense, it is more ‘safe’ that a high income is paid to you between 3 or 4 tenants, than the same income a single family in which only the parents work for example " explains Richard_IFI. And those who best meet these requirements are usually students.

Perfect tenant profile rent professionally revealed 2021

In particular, Richard_IFI seeks “to be a group already formed, to meet because they are friends of the institute in their hometown or have coincided in the same college and now they want to change residence"” The reason is that”the group rents the entire house and everyone is jointly responsible for what the rest do, so if one for some reason has to leave the house, the others must assume the costs of the lease".

Solvency and ability to pay are important, but there are other qualities that are also sought by professional renters.

Carlos Galán also seeks stability”to ensure less rotation in the floor and not have the property empty and without income". One way to achieve this is to look for a specific tenant profile, such as families versus students.

Perfect tenant profile rent professionally revealed 2021: However, even with students you can make sure you have it rented all year round. That is the experience of Richard_IFI, who believes that his students will not leave the floor because “you don't want to lose the opportunity of having a good modern and well-maintained to wait to September to find another in the worst of conditions, and once again, as it is 3 or 4 families, the cost is diversified, and if in summer you want to come to Madrid with family and friends spend a weekend, have where to stay”.

For Professional Rental it is important that the tenant “take care of the property as if it were his own, that he does not cause problems to the neighbors and that he has the ability to dialogue”, especially in long-term rentals. In fact “ " as the years pass and things go well, I try to encourage as much as possible that the tenant does not go elsewhere. I don't mind getting slightly lower returns if it makes everything go smoothly for the longer the better.”

One way to encourage that commitment is to "rent without furniture, so that the tenant "invests" and commits to stay longer (a move is lazy...) ", stresses Carlos Galán. At the end of the day, having to rent the apartment every so often is an additional workload. That's why Carlos Galán is not in favor of renting rooms as well as Richard_IFI.

Perfect tenant profile rent professionally revealed 2021

One way to ensure that stability and peace of mind is rent payment protection insurance. Their mission is to pay rent to the landlord in case the tenant does not. ” I always hire him, at least the first year until I meet the tenant, " Galán unravels.

In Alquiler Profesional they always include it in all their homes and recommend that “the collection of the rent is always guaranteed whatever the case may be. In this way the return on our investment will be somewhat lower, but in return the security becomes exponentially higher.”

The price of these insurances represents around 4% of the annual rent depending on the coverage to be contracted. In addition, they usually include additional services such as tenant solvency studies or legal defense expenses. In fact, Carlos Galán takes advantage of these additions as the first filter to find out the solvency of the tenant. Simply request a quote to cover a potential tenant and "depending on whether they accept to cover the risk or not, you will know with enough certainty whether you can trust or not"”

What you should always do is review the fine print of the contract and what coverages it includes. Many insurances only cover defaults for 9 or 12 months and an eviction or claim process can take longer.

Perfect tenant profile rent professionally revealed 2021: Within the insurance, Richard_IFI recommends also including a good home insurance as a way to avoid complications and expedite any problems inside the house.

With these data, how is the ideal inquino?

For Carlos Galán " My ideal profile is young people (couples or friends) newly emancipated, with work, and without children. They pay well, do not give too many problems and do not have a significant risk of families with children in case of default.”

For Richard_IFI, their ideal are groups of students with a common history and good ability to pay.

For Professional Rental, solvent people, with a sense of responsibility and capacity for dialogue.

"As investors we look for as much profitability, as few problems and few headaches", says the first.

# Perfect tenant profile rent professionally revealed 2021 #