Every landlord knows that tenants can make or break a rental experience. A good tenant will allow you to do little work and still receive payments on time. However, a bad tenant will leave you to wonder about the state of your property as you write a “pay or leave” notice. The best way to ensure you end up with only the best tenants is a successful screening process. But what does this look like? How do you create one? Here are a few basics.
Set Your Requirements
Before beginning the screening process, look at your property and decide what kind of people you want to live there. Will you allow pets? Look at how much you’re charging for rent and calculate how much tenants would have to make to afford living there. How low of a credit score will you allow? If an applicant has a bad reference or a past misdemeanor will you still approve them? Whatever you decide, be firm and don’t let anyone pass initial screenings that don’t reach these standards.
Create an Application
Using the same application form for everyone that applies can better help you evaluate tenants and keeps you in compliance with fair housing laws. Be sure to collect information on rental and employment history, references, and prior evictions. You’ll also want to ask for personal information such as a full name, social security information, and a spot for a signature.
Run a Credit Check
Once you get the application back, it’s time to run a credit check. This will show you details about the prospective tenant’s credit history dating back seven to ten years. Look for a history of late payments, collection accounts, or issues such as bankruptcy. This will also allow you to see any current debt they are in. If a prospective tenant has maxed out all of their credit cards, has taken out a hefty loan, or has several unpaid balances, they probably won’t be able to afford rent.
Run a Background Check
It’s also a good idea to run a background check on your applicants as this will give you a detailed report of the tenant’s past. Although this usually requires a small fee, it will provide you with information such as their eviction history, criminal history, and various public records such as legal battles. Although not everything that shows up will be cause for denying their application, there could be red flags that you can bring up during the interview process.
Contact References
One step that many landlords skip is contacting the previous landlord and current employer the tenant lists. Verify that the tenant has a reliable, steady income and that they’re telling the truth on their application. Talking to their current or previous landlord will also let you know what kind of tenant they’ll be and what their lifestyle is like.
Interview the Tenant
If all of the background information checks out, you may want to interview the tenant either in person or on the phone. This will help you find out more about the tenant and what’s most important to them in finding a property. Consider asking them if they have a pet, if they plan on having roommates, what their work schedule is like, if they smoke, or any other questions you may feel is important. However, it is also important to keep in mind that the Fair Housing Act stipulates that landlords can’t discriminate based on color, disability, family status, national origin, race, religion, or sex.
For further information on how you can best screen potential tenants, contact Keyrenter Main Line today!