I always get questions from new landlords on how to screen tenants. Finding the best tenants for your property is a necessity that will save you headaches down the line. I wanted to share some helpful tips for tenant screening that will help you pick quality renters for your property.
The tenant application process
All renters have to progress through a set rental application process. The applicant should present a photo ID (like a driver’s license) for identity verification. The applicant will also need to consent to a criminal background check. I prefer to ask the applicant some questions as part of the application process. My belief on finding good tenants is that I want to get a well-rounded sense of them and whether they’re going to be a good tenant. I also charge a refundable application fee. The fee is a nominal amount of less than $50. This is a small hurdle that helps bring in more serious applicants and keep out the window shoppers.
How to screen tenants
• I always talk to the current or prior landlords of the applicant. I like to ask the current landlord if there’s been any trouble with the tenant (like noise complaints from loud parties) and whether they expect to refund the tenant’s security deposit.
• I verify the tenant’s job. If self-employed, I want to see regular income deposits showing up on bank statements.
• I check if the tenant has had any evictions. If they have a checkered rental history, I will avoid them. But if they’ve only had one eviction, I might dig in further and see what the circumstance was.
• I always run a credit report on the tenant. The tenant’s debt ratio is something I like to keep an eye on. Someone who is maxed out on their credit cards is not making sound financial decisions in their life.
How to protect against falsified applicant information
I occasionally get the tenant who falsifies information. The easiest things for a tenant to falsify are their past landlord references.
If they falsify their prior landlord’s info, I can verify this by calling their currently listed landlord. I’ll ask questions like how much is rent, what’s the location of the property and how long has this current tenant lived there. I always want to ask them these questions to make sure the landlord knows who lives there and that we’re both talking about the same person. I also suggest that property managers visit the county treasurer website for the most up to date property information. Another way of verifying the address is to look for the current address that’s listed on the tenant’s utility bill.
Another issue that property managers in Campbell sometimes deal with is faked income documents. My number one goal as a landlord is to make sure my that the rent gets paid. That’s essentially what the tenant screening process does: it helps the landlord separate who is going to pay rent from the people who are more likely not to pay rent. I can’t make a proper assessment of a tenant’s risk if I’m not getting good employment or income information. If the tenant does falsify their employment situation, one way I combat this is to ask for some of their current pay stubs. Another effective method for verifying a tenant’s employment is to simply call their employer. This allows me to find out employment length and some other information myself.
Evictions are black marks against a tenant’s reputation as a good renter. If a tenant has an eviction, they’ll likely try to bury it in some way. If they are not able to bury it, they might resort to lying about it. If a tenant attempts to hide an eviction, I’ll either call up their previous landlords or find the evictions myself using civil records.
I also am very wary of the underreporting of the number of occupants that a tenant will bring with them. This is a common occurrence to deal with for a property management company in Campbell. Property management managers should always ask the prior landlord about who exactly was living at the residence.
There are some other warning signs as a property manager that I’ve learned to sense throughout the years. One warning sign I’ve learned to trust is my gut reaction to a client. I always like to look for clues as to whether or not they’ll be a good tenant. Are they anxious or eager to sign the contract without even looking at the property? That would be a red flag for me. In general, if a tenant wants to skip some part of my application process just to close a deal, I’m going to take a step back and assess the situation. I always want to follow a set checklist and will never skip steps just to close a rental agreement.
Tenant screening is a tedious process that’s well worth the amount of effort. Tenants can cause major headaches for you as a property owner. If you don’t focus properly on screening your tenants, you might have to worry about paying for evictions from your home or dealing with bounced checks. Every landlord wants stable long-term tenants, and following a set tenant screening protocol is how you get great tenants.