Working with haste to rent your property is never a good idea. While you may desire to start earning income, you are more likely to lose profit at your investment property if you accept anyone.
Screening tenants is one process you never want to skip. You are more likely to have to evict a tenant if you fail to do this for reasons such as missed payments.
Increased risk of property damage is another concern. Keep reading to learn what to include when you screen applicants as the landlord or property manager.
1. Create a Checklist
Not everyone who has an interest in your house should qualify. The best way to find the best fit for an applicant is to make a checklist. The prospective tenant(s) should be working and must make a certain amount per month as proof they can afford the place.
Ask that they earn 1.5 to 2 times the cost of the property at a minimum. You should also verify their employment references to ensure they are indeed working.
2. Complete a Background Check
As a property manager, it’s also your responsibility to do a background check. There are three things you want to look at: criminal history, credit history, and eviction history.
Checking their background to see if they have any criminal history seems invasive, but it’s a common requirement you should do. It would be an expensive mistake to make.
Their credit history may be the most important as it is a trustworthy way to see how well an applicant pays money they owe and if it is on time. You must check to see if a prospect has a prior eviction as well. While not 100%, there is an increased risk you may have issues with needing to evict later as well.
3. Understand Screening Laws
There are limits as to what you can when it comes to screening. The Federal Fair Housing Law protects applicants and ensures everyone receives fair consideration. For example, you can’t discriminate against someone at a chance to qualify over their color, race, religion, gender, status, or presence of a disability.
4. Start an Application
Talking to all applicants and meeting are a must, but the process isn’t complete without an application. All terms and agreements must be in writing, not just verbal.
Upon approval, the applicant agrees to the set rules and expectations. This is vital in the event issues arise or you need to go to court.
5. Narrow Your Selection
If all goes well, you will have several applicants and it will be your job to choose the right one. You want to find an applicant that meets the requirements you set or exceeds them.
It’s best to wait for new applications if someone does not meet them. Never settle and accept.
Screening Tenants Will Save Time and Money
You will save hundreds to thousands by screening tenants before they step foot on your property. Although it may take time to complete, you lower your risks of dealing with someone who will damage your place or fail to pay on time. If you need assistance keeping track of your property and want to find the right property manager, contact us.