Tenant selection seems like it should be pretty easy; if an applicant can pass a simple credit check and has the necessary move-in funds, it’s a go, right?
Not always.
You want to spend some time really screening tenants because the resident you place will have a major impact on whether you have a profitable rental experience or a dreadful one.
When you fail to screen tenants thoroughly, you run the risk of placing a bad tenant who will bring you stress and hassles. Spending the time and resources on a great screening process will save you from tenant evictions, late rent payments, and property damage.
If you’re new to screening tenants, there are a few things to know.
Establish Your Screening Criteria
Federal and state fair housing laws are pretty strict, and when you’re screening tenants in Kansas City, Liberty, or anywhere in the Northland, you have to screen each tenant the same way. The best way to do this is with written standard rental criteria. You can establish what you’re looking for and what kind of standards prospective tenants will have to meet in order to be approved for your property.
Provide this criteria to every individual who wants to apply for your property. It will save everyone time and application fees if people know right away that they won’t meet your income requirements, for example.
Collect a signed application from anyone who is 18 years of age or older and hoping to move you’re your rental home.
Credit and Financial Responsibility
Checking credit is one of the first and most basic things that a landlord or a Kansas City property manager will do when screening tenants. You can establish a specific credit score that will qualify an applicant, or you can focus more on the credit report, which will show you how the applicant handles debt and bills.
It’s hard to find a tenant with perfect credit. Medical debt, student loan debt, divorce, and even recovery from the recent pandemic can tank a credit score. Instead of focusing on that one single number, consider looking at the credit report as a whole. If you study payment history, for example, you can get a good idea about whether an applicant meets their financial responsibility.
Make sure there are no debts owed to former landlords, apartment communities, or management companies. Look for overdue or unpaid utility bills. These are the things that might caution you against approving the tenant for your home.
You can also use the credit report to make sure information on the application adds up, such as former residential addresses.
Eviction and Criminal History
Renting to someone who has recently been evicted is risky. Always check the national eviction records and look for past criminal convictions. A few parking tickets is probably not grounds for a denial, but an applicant with a history of violent behavior or drug felonies will not make a great tenant.
Verify Income and Employment
You need to make sure the applicants can afford to pay rent every month. Ask for monthly or annual income, and make sure it’s at least three times the amount of your rent. Verify that amount with employers or request pay stubs. Many tenants work for traditional employers, but if they are self-employed or retired, you’ll have to verify income in other ways. Ask for bank statements or tax records.
Conduct Rental References
It only takes about five or 10 minutes to pick up the phone and call a former landlord or a current property manager. Verify the dates of residency and ask if rent was paid on time and the property was taken care of. You can discuss whether the tenant had pets and if there was damage left behind.
Find out if proper notice was given before the tenant moved out. You can get a lot of information from people who have rented to your prospective tenant before.
This is just a general overview of how to screen a tenant, and it’s a good starting point for landlords in Parkville, Gladstone, and North of the River. For more information or help with leasing and Kansas City property management, please contact our team at Donley Carver Investment Properties.