The one task that you do which will ether make an investment property run like a smooth business, or it can crash in flames and burn a hole in your pocket is your tenant selection process.
When selecting a tenant, I would recommend allowing for a longer vacancy period, and keeping the asking rent $10 below what you think your property could get. This will give you the most level of interest from the limited number of people looking to rent that size house, in that location at that point in time. It will cost you a lot more if you have a tenant who doesn’t pay rent and damages the house.
The vetting process starts on the phone when interested applicants call in. They are asked a few questions to qualify them for a viewing. Then at the viewing they are sized up, do they look like they will fit into the neighborhood. Are they well mannered, who have they come to the viewing with, will they look you in the eye and prove to be trustworthy? Property managers develop a good gut feeling about people over time.
Once the applicants pass the screening process, they will then be checked out on paper. Rules need to be set as standard policies, like a minimum credit score, landlord references need to be current, if they are on Social Welfare then a redirection of they rental needs to be part of the criteria. Also don’t be afraid to look them up on Facebook.
If your applicant still looks good by this stage, but you still have an unsure feeling about them. Then fix the tenancy to 6 months, and get the full move in costs before pulling your add down. If they turn out to be poor tenants, don’t renew their tenancy, and start over in 6 months time.
The money an investor saves through buying in rough areas, should be put to the best property management teams in that area, and set aside a budget for high wear and tear. Also keep your landlord insurance policy current, and all terms and conditions met.