As a landlord, you always want to choose the best possible tenant to live in your rental property. This is also one of the most challenging aspects of having an investment property to rent out. The desire to fill a unit quickly can sometimes get in the way of finding a good tenant.
Unfortunately, unreliable tenants are a torment for landlords, they can be difficult to deal with. They come with late rental payments, damage to property, complaints from neighbors, among others.
Tenant screening provides several benefits to you including peace of mind, safety and quality tenants which also results in fewer property damages and evictions. In this post, we are sharing the 5 most important things you should know about tenant screening.
WHAT TO LOOK FOR WHEN SCREENING RENTAL APPLICATIONS
After you have successfully marketed your property and you have an applicant interested in your property, it is time to begin the process of gathering their information to evaluate their financial, rental and criminal background information.
It is important that you or your property management company state your leasing criteria upfront in your rental advertisement. This is your opportunity to address things like pet restrictions, special policies, parking arrangements, etc. This way applicants can predetermine if they are a good fit for your property before even contacting you. This will help you get a smaller but more qualified pool of prospective tenants from the start.
BACKGROUND CHECKS
This type of database search is one of the most important parts of tenant screening. It provides a comprehensive look at the applicant, including criminal history, felony, misdemeanor, sex offender and inmate records. The applicant will have to consent for you to do a background check.
By requiring a tenant background check, you are protecting yourself and your community, as well as helping preserve the safety and value of your property.
PROOF OF INCOME AND CREDIT REPORTS
You want to make sure your tenant will be able to make rent payments on time each month.
An applicant who meets your income requirements after checking on how financially responsible he or she is, can also be an indicator of how well your tenant will pay the rent on time.
When getting credit reports, you should obtain a copy of the report directly from a consumer reporting company instead of getting it from the applicant since this information can be falsified, outdated or inaccurate.
EVICTION REPORTS
As much as possible, you should avoid renting your property to applicants who had been evicted more than one time. While there are certainly exceptions, an eviction is generally a major red flag.
Rental applications usually ask for the applicant’s rental history, including contact information for previous landlords and/or property managers. You can personally contact these references to find out what kind of tenant the applicant is. Some background checks will even reveal recent instances of eviction on a prospective tenant’s record.
WARNING SIGNS ON TENANT SCREENING REPORTS
Finding a reliable tenant for your rental property will protect you against financial loss or damage to your property. A tenant with a violent history can present a liability risk that is not worth taking.
The ideal tenant has a monthly income that is three times the rent rate, a clean eviction report, good credit score, positive reference checks and steady employment history.
You may want to pay special attention to tenants who have history of moving frequently. You need to ask yourself, why are they moving? are they in a hurry to move? are they lying or giving inaccurate information? have they been evicted or broken a rental agreement before?
Although landlords have the right to choose who to rent to, remember to keep fair housing laws in mind.
At Pristine Property Management LLC, we conduct tenant screenings to all applicants, to help determine who could be the best long-term tenant for your investment property. Contact us today.
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