The secret of succeeding in the real estate business lies in proper screening of all prospecting renters. It does not matter how honest a person seems to be. Before you let him or her move into your premises, you must subject them to a thorough tenant screening. Such vetting will ensure that you end up with high-quality and well-paying tenants, who will co-exist peacefully with other residents, and also take good care of your property. So how can you go about such a process? Here are practical steps to do it.
8 Tips for Screening Tenants
Define your ideal tenant
Naturally, as the owner, you will have a preference of the type of residents you want on the property. To be a great landlord, you need to take the time to clarify what qualities an ideal tenant must possess. For instance, they should; earn three times more than the rent amount, have a stable job, have no criminal background, and have above reproach landlord referrals. Such a description equips you with the perfect yardstick against which to assess the applicants.
Include your ideal tenant description in your listing
Contrary to what most landlords believe, effective tenant screening starts way before the application process. It should commence when you are crafting the vacancy advertisement or listing. As part of the message, you could include a brief description of the type of renter you want. By including a description, you deter prospects who do not fit the description from wasting your time. Besides, it increases the likelihood and speed of attracting suitable tenants.
Set up a formal application process
Even though stating in the listing what qualities you are searching for is critical, you further need to ask every interested candidate to fill out an application form. The document will help you to obtain valuable information such as the applicant’s legal names, social security number, driver’s license, ID or passport details, credit scores, as well as employment, tenancy, and criminal history. Through the form, you should also get the applicant’s permission to run background and credit checks, and even talk to his or her employer, landlords, and neighbors.
Conduct Credit and Background Checks
Most first-time owners make the mistake of trusting the information that tenants put on their application form. That is not advisable since renters tend to hide any information that might jeopardize their chances of getting the house. Hence, you need to take the investigation a notch higher by running a credit and background check. The credit check will reveal an applicant’s employment background, credit worthiness, rental history, and whether the person can indeed afford the rent. The background searches, on the other hand, helps to unveil a person’s identity, past, and criminal record. As a result, you will be in a position to make an educated choice.
Compare the Background and credit check findings with the candidate’s Application details
After conducting the investigations, you must compare what you find with the information that the applicant gave on the application. Such a move will help weed out those candidates who tried to hide incriminating info. After all, quality tenants will provide honest information, irrespective of whether it will negatively impact their application or not. If you discern any discrepancies between the two, it is best to disqualify such an applicant and save yourself from countless headaches once the tenant occupies the property.
Scrutinize the best applicants
Logically, after comparing the application details to the checks findings, your list of tenants will narrow down. You should then create time and talk to the candidate’s current and previous landlords, employer, and neighbors. It will help to ascertain whether an applicant was a good tenant who pays rent on time, can afford the rent, takes good care of the property, and gets along well with neighbors.
Interview the successful applicants
For you to identify the ideal tenants out of the successful ones, you should have a personal interaction with them. A practical and convenient approach is to interview those prospects over the phone to know them better. From such an interaction, you can determine whether you feel comfortable having such a person as a tenant.
Show them the rental agreement terms
The last and final stage of tenant screening should be to take the qualifying applicant through your lease contract terms. If he or she cannot abide by them or has reservations about them, then you are better off disqualifying such a candidate. Only settle for the one who agrees to your rental agreement terms.
While there is no such thing as a perfect tenant, such a screening process can significantly increase your chances of getting the best occupants for your property. Just make sure you do not break any of the Fair Housing regulations.