Good tenants will help you have a profitable and pleasant investment experience. They’ll pay rent on time, take care of your home, and stick to the requirements of your lease agreements. Bad tenants, on the other hand, can cause a lot of stress and drama and lead to larger expenses. You can find yourself evicting them and paying to repair damages that were left behind.
Finding great tenants isn’t complicated, but it does require a fair, consistent, and rigorous screening process. As professional Lancaster property managers, we screen tenants for our owners on a regular basis. We know what to look for and which red flags require closer investigation. Today, we’re sharing some of our own tips on tenant screening.
Lancaster Property Management: Credit and Criminal History
One of the most common things for landlords to check is a credit score. The credit score can give you a summary of financial strength, but we prefer to evaluate the entire credit history of every applicant. Look for things that would indicate a problem such as overdue or unpaid utility bills or judgments and outstanding debts that are owed to former landlords, property managers, or apartment buildings. Check for past evictions and make sure it’s a nationwide check.
You’ll also want to look at a prospective tenant’s criminal history. You don’t necessarily want to reject someone who has a speeding ticket, but any indication that there have been violent convictions or drug charges in the recent past might give you pause.
Lancaster Property Management: Verify Income
Your screening process must also include verifying income. You want to make sure your tenants can afford the rent. Standard best practices say that your tenant should earn at least three times the monthly rent. So, if your property rents for $1,000 per month, you’ll want an income that’s at least $3,000 per month.
Verify the employment that’s listed on the application and ask for proof. You can collect pay stubs from people who have jobs, and you can ask for tax forms and bank statements from anyone who is self-employed or retired.
Talk to Former Lancaster Property Managers and Landlords
Talk to former and current landlords. This is one of the best ways to find out how a tenant has performed in the past. You can ask if rent was paid on time and if any damage was left behind. Ask the landlord if the tenant was entitled to a full security deposit refund and whether the appropriate amount of notice was given before the tenant moved out. You can ask about pets and communication.
When you’re screening your prospective tenants, you have to make sure you are following all fair housing guidelines. Treat each application consistently by establishing a documented procedure. Put your rental criteria in writing and offer it to applicants before they fill out the application and pay the application fee. With all of this documentation, you’ll be able to demonstrate that you follow your process every time and treat each applicant fairly.
Tenant screening can be daunting. If you are unsure about your screening capabilities, work with a professional Lancaster property management company. We’d be happy to help, so contact us at Fetch Home Management.
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