If there is one thing we tell every single landlord that we encounter, it is this: Whether you use us or another reputable property management company, hire someone to conduct your tenant screening. Protect your investment by investing the money in a good screening process.
Over the years we’ve received so many calls from landlords who leased their rental property themselves, and now the tenants aren’t paying rent, or maybe never paid any rent at all once they moved in. They’re months behind, the house is wrecked, and eviction hasn’t been filed yet, which means the landlord is still a month or two from re-gaining possession of the property, and then has the task of getting the home back to rent ready status. After all is said and done, they’re 6-12 months worth or rent in the hole after lack of payment and the cost of getting the property ready again. What a nightmare!
How can a landlord protect themselves from this happening? Well, you know what we’re going to say, of course. Hire a professional, reputable property management company! We have a 14 point screening process, and we know what to look for to find the best candidate. Here’s a few of the things we look for:
Credit Score. Credit score is important, but what also is important is what is on the applicants’ credit report. Past due and late pays on utilities, cell phone bills, auto loans, mortgages, rents are all red flags. The applicant will have a story on why these are behind – it doesn’t matter.
Rental History. To me, this is the most important thing to screen. Call all current and recent landlords, verify owner names on tax records (applicants will have friends/family members pose as landlords). Make sure there is no huge jump in rent price. If the applicant is currently paying $900 per month, and wants to rent your property for $1400, be vigilant in the rest of your screening, because that’s a major budget adjustment for the tenant.
Income. All of our tenants must have a minimum monthly income of 3 x’s the monthly rent. We do not make exceptions on this, and we don’t advise you to do so either. Also be sure to take into account their current monthly bills and make sure they really can afford it.
Background Report. Don’t skip on the background report. Run a national background report, and also check casenet for criminal records, evictions, current eviction filings, etc.
At the end of the day, stick to your criteria and be firm. Don’t take the easy road because someone unqualified can move in quickly and you can start collecting rent more faster. We all have stories, and we all have hardships, but at the end of the day this is your investment, probably one of your largest assets, and it must be protected.