Finding the most qualified resident for your rental property requires a robust screening process. You want to get a complete sense of your prospective tenant’s full background, and you want to make sure you’re offering a lease agreement to someone who can be counted on to pay rent on time, take care of the home, and follow the lease terms.
While you’re screening thoroughly, you also need to be aware of fair housing laws and requirements. You’ll need a fair, consistent, and well-documented process.
We screen tenants all the time as local property managers, and we’re sharing some of our best practices with you so you can more effectively screen potential residents.
Establish Qualifying Rental Criteria
Before you collect applications (or even provide them), you need to establish some consistent rental criteria that all applicants will have to meet before they’re approved for your property. This lets people know what you’re looking for in a tenant. They can make their own decisions about whether they’re likely to be approved. It saves both of you time and money. Unqualified tenants will probably not bother filling out an application.
Your criteria might include:
- A minimum credit score.
- Minimum income.
- No prior evictions.
- Positive rental references.
Put the criteria in writing and provide it to your prospective applicants.
Verify Income while Screening Tenants
A tenant needs to be able to afford your rent, otherwise you’re setting them up for failure. Best practices say that tenants should earn at least three times the monthly rent. We think this is fair. It means that if your rent happens to be $2,800 per month, you’ll be looking for income that’s at least $8,400. Ask for proof of what an applicant earns, whether it’s a pay stub, an employment contract, or bank and tax records.
Check Credit Reports
Financial security is also an important quality in a good tenant. The most qualified resident will be able to demonstrate that they’re financially responsible. You can set a minimum credit score, but be sure to investigate the entire credit report. A tenant can have a decent credit score but still owe money to past landlords or apartment communities. That’s not someone you’ll want to rent to. Other red flags include utility bills that are unpaid or accounts that have been closed.
Talk to Former and Current Landlords
It might seem like a lot of extra work to call or contact former landlords. But, the effort is worth it because former landlords can give you the best idea of how your potential tenant will perform when they move into your property. Ask landlord references
- Whether rent was paid on time and if it was late, how quickly the tenant managed to catch up.
- Whether maintenance needs were reported in a timely manner.
- If any damage was left behind.
- If the tenant had any pets, and whether those pets were clean and well behaved.
- If they’d rent to the tenant again.
Make sure you’re talking to the actual landlord, property owner, or property manager. Applicants who don’t have great relationships with their landlords may not want you talking to them. You don’t want to find yourself talking to friends or family members who are posing as former landlords.
We have some outstanding screening practices in place, and we’d be happy to talk with you more about finding the most qualified resident for your property. Please contact us at Stowers Real Estate.