Are you a landlord? If yes, then surely you are aware, there are many advantages and challenges of being a landlord. One of the biggest challenges is choosing a good tenant for your property. A good tenant is one who pays rent on time and maintains the property responsibly.
If you get the wrong tenant, it forces you to face many issues. Rent is not received on time, there is a risk of property getting damaged, and the tenant can run away without paying rent are common issues. Therefore, through an organized approach, you can follow some steps that help you find a better tenant.
However, don’t forget, before you start searching for tenants, make sure your own property is in the right condition. If there are any small repairs pending, get it done right now. This takes a small amount and investment.
These days, short term instant payout guarantor loans are also available. Therefore, if financial sufficiency is your issue, these short-term loans with affordable terms will solve the problem. After all, tenants, too, have the legal right to live in a safe and strong property.
Create a clear rental application
First of all, it is necessary to create a clear application to apply for rent. It must mention all the important aspects that will help you in screening the prospective tenants. These points are:
- Full name and contact details.
- Social security number.
- Current employer and employee history.
- Rental history.
- Monthly income.
- Consent to run credit checks.
Make sure that your rental application is according to the local laws. Follow the rules of discrimination law and data privacy.
Set pre-screening criterion before final acceptance
By establishing pre-screening criteria, you invite only deserving candidates, thus saving your time from being wasted. Candidates who do not match those criteria will not apply, and you can screen better tenants in less time. For this, you need to mention some factors in your pre-screening criteria. These are –
- Minimum monthly income requirement. 2.5 to 3 times of rent.
- No prior evictions.
- Acceptable credit score range.
- Pet policies or non-smoking policies if applicable.
- Employment requirements.
Mention these criteria conditions clearly in your pre-screening list. This will make only deserving people apply to you.
Interview potential tenants
After receiving applications that qualify for the pre-screening criteria, you can now interview potential tenants. You can either conduct this interview face-to-face or through short telephonic conversations.
This gives you an opportunity to verify the applicant’s personality, basic details, and communication style. Asking some suggested questions will be helpful for you, such as:
- Why are you moving?
- How many people will live in the unit?
- When do you plan to move?
- Do you have pets?
- Can you provide earning proof?
During the interview, do focus on red flags such as inconsistent job, unwillingness to provide documentation, or vague answers.
Verify their employment and income
The most important aspect is to verify the employment or income of your prospective tenant. Sufficient and stable income and employment indicate the tenant’s ability to pay the rent. Ask for documents and details from several sources like recent pay slips, bank statements, and tax returns if they are self-employed. Otherwise, letters from the employer if employed.
The tenant’s gross monthly income should be 2.5 to 3 times the rent amount. Only then is it believed that he would be able to pay the rent on time. If a prospective tenant is unable to get his income verified or has a history of changing jobs many times, be cautious.
Conduct a background check
Checking the tenant’s background is still as important as checking the income and employment. This gives you timely information about the prospective tenant’s previous eviction or possible criminal history. Depending on your location, you can demand some specific details,
- Criminal records,
- Identity verification,
- Eviction history.
Keep in mind that your screening practices should be according to local laws and housing laws. You also have to keep in mind the legal limitations for obtaining criminal records.
Run a credit check
It is very important to obtain a credit score. It provides you an insight into the investment behavior of the applicant. A good credit score essentially indicates that an individual can manage to pay rent and bills on time.
While doing a credit score check, it is vital to look at some specific factors, like
- credit score,
- payment history,
- outstanding debt,
- collection accounts,
- bankruptcies and foreclosures.
Before applying for a credit score, make sure to take the written permission of the prospective tenant. Use a credit bureau or tenant screening service.
Check rental history
Checking the rental history is one of the most important parts of screening. In this, you should take references from your own and the latest two landlords. You can contact them and ask important questions like
- Did the tenant pay rent timely
- Did he maintain the property,
- Were there any complaints,
- Would you find them again?
With the help of these four to five basic questions, you will get to know a lot about your tenants. If the latest two landlords mention issues, in that case this tenant is not a good option for your property.
Have a clear lease agreement
After a long process, you have screened your prospective tenant. Now, when you have finalised your talent, it is necessary to make a clear return agreement with the tenant. Some important points are part of this agreement.
- Monthly rent and due date,
- Lease duration,
- Security deposit amount,
- Rules and regulations for maintenance, no responsibilities etc.,
- Pet policies
- Procedures for complaints and repairs.
Therefore, read the agreement once with your tenant. This will create mutual understanding between both of you.
Conclusion
After following all the steps given above, you can easily screen and find out your prospective tenants. The advantage of this organized process is that you get to know about two important aspects of the tenant: earnings, capacity, and rental history.
By doing this, you always choose the right talent. The more you know about an individual beforehand, the better tenant you will be able to choose. Your property is your lifetime investment, and it is necessary to hand it over to the right hands. You can earn a lot through rent, but if the wrong tenant comes, your property can also suffer losses. Therefore, even if it takes some time, it is important to choose the right tenant.
Another important factor is to always notice if the tenant has a stable financial history. Ups and downs are there in everybody’s life. Try to notice how smartly the tenant handled the finances. For example – if you see debt consolidation in credit reports, it is clear that the person is concerned about debt management. That shows responsible financial behavior. This is better than a person who delays payments and still does not work on any solution
