We have some tenant screening tips that we’re sharing so property owners can avoid bad renters. At Five Star, we don’t have to deal with bad tenants very often because we have written standards in place and procedures that tell us what to look for and what to avoid.
What is Tenant Screening?
One of the many issues we see when people are trying to manage rental properties on their own or working with lower priced or inexperienced property managers is that they don’t know how to deal with bad tenants. The best way to deal with problem tenants is by avoiding them in the first place. Everyone likes to dwell on the idea that you want to fill your property with a tenant as soon as possible. But, if you find and place a tenant tomorrow and that tenant never pays rent, it doesn’t matter that you avoided a longer vacancy. You’re still not collecting rent. It’s a balancing act; and your process for screening tenants should help you find someone who doesn’t cause damage, who pays rent on time, and who doesn’t cause problems for you as a landlord. You don’t want a renter who increases your potential for liability issues.
Property Management Burlingame: Credit
Credit is the first thing you should look for, and you want impeccable credit. There should be no blemishes at all. It’s not worth it to feel sorry for people; you’re not running a charity. For our purposes, this is a business, and you should look at it that way to find quality tenants. In addition to credit, look at the applicant’s references. Make sure the information on the credit report is accurate. Talk to employers, previous landlords, and anyone else you can get a hold of to verify the application information.
Property Management Burlingame: Income
Proof of income is also critical. Someone might look great on paper and claim to earn enough money to cover rent, but if you cannot verify the income, you don’t want to approve that applicant. With the rise of technology, it’s easy to print a fake pay stub. Credit reports are harder to falsify. Verify income with bank statements, pay stubs, and phone calls to employers. This will help you reduce the risk of nonpayment down the road.
Property Management Burlingame: References
Strong references from previous landlords, current landlords, employers and non-family acquaintances is huge. While we are limited in the types of questions that we can lawfully ask, most reference providers will voluntarily disclosure very useful information to help us be fully informed as we develop our underwriting decision.
Once all these items are covered and you find someone to meet the criteria, you can expect a smooth tenancy. This is the benefit of having high standards. The purpose is to prevent headaches down the road. If it takes a little longer to find the right tenant, it’s still worth it. You can give up that one week of rent and take your time. It will save you money in the long term.