Millions of tenants are evicted every year, resulting in lost profits and complications for landlords. If you want to get the most out of your property investment, you need to pick the right tenants.
Despite the importance of screening tenants, many landlords make fundamental mistakes. This article lists some of the steps you need to take when evaluating applicants to live at your property.
Credit Score
An applicant's credit score can tell you a lot about how likely a potential tenant is to pay on time. A credit score shows how good an applicant is at paying what they owe on time. A credit score check should be a central part of your tenant screening process.
Generally speaking, you should look for a credit score of at least 650, although many landlords have different standards.
Background and Eviction Checks
You should never do a tenant screening without doing a background check. In particular, you should find out if the tenant has ever been evicted from a previous residence.
If it turns out a tenant has, in fact, been evicted, you probably don't want to rent to them. You might consider digging deeper by getting in touch with the applicant's previous landlord.
Employment History
Another important tenant screening method is looking at employment history. Not only does having a consistent record of employment show that the applicant can pay, but it also shows good character.
If an applicant has a spotty employment history, it suggests they could cause you problems as a landlord. You should be especially careful of individuals who've only recently started to work. If their job falls through, you could find yourself with a tenant who can't pay the rent.
Previous Landlord References
You should also try to get references from a previous landlord. If an applicant seems reluctant to provide such a reference, you should see it as a red flag. In this case, it's likely that they had a bad relationship with their previous landlord.
Reason For Leaving Previous Residence
You should also always ask why an applicant left their previous residence. This is a particularly relevant question if they're continuing to live in the same area.
If an applicant is reluctant to answer this question, it suggests there may be issues with the previous landlord. The applicant could also just be an impulsive person. If the applicant's response to this question raises your suspicions, you should consider doing some more digging.
Current Income
The most important information for you as a landlord is whether or not the applicant will be able to pay the rent. You should look for applicants who earn significantly more than the month's rent. This makes it much more likely that you'll always receive the rent on time.
Properly Screening Tenants Can Save You Trouble
Screening tenants is a lot of work, but it is preferable to the inconvenience you'll face with a tenant who can't or won't pay the rent.
If you want to save time and energy evaluating applicants, you should consider working with an agency. Get in touch with us today to find out more.
