How to Successfully Screen Tenants For Your Investment Property



Believe it or not, effectively screening tenants can help you to eliminate as much as 95% of rental problems. That said, for those of you who find it difficult to relax when experiencing vacancies, then you’d probably want your property to get rented as soon as possible, right? Well, familiarize yourself with these tips to ensure that you’ll be able to screen the tenants properly.

5 Ways to Screen for Future Tenants:

1. An Application Form Can Do Wonders
Before anything else, make sure that your prospective tenant would complete an application form. Don’t worry; if you have never written one before, there are a lot of rental application form examples from the local real estate association. Likewise, you can also create one using a Microsoft Office template and you’re good to go.

The application form should cover everything necessary regarding the rental property and the policies the tenant should obey. For best results, make sure that the application form contains financial information, personal information, and employment information. It should also state that a criminal history report, background check, or credit check can be requested, and the tenant would give full authorization in case it’s needed.

Pay attention to the following:

– Current income: The income of your prospective tenant should be enough to cover the rent and other living expenses.
Current and previous employers: It’s important for you to have an idea how long the tenant has been at their current job, and if he or she has been switching jobs every couple of months.
Financial information: Credit cards, bank accounts, balances, and minimum monthly payments could help you get a better picture if your tenant would be able to pay the monthly rent on time.

2. How Much Do You Earn Every Month?
Don’t be afraid to ask this question as it will help you determine if the prospective tenant is indeed capable of renting your property. As a landlord, you obviously want a tenant who earns regularly and would have enough to settle his monthly bills. For example, if the monthly rent is $2,000, then you’d want a tenant that earns more than $2,500 every month.

However, you should also keep in mind that the monthly income wouldn’t be able to tell the whole story either. That’s why additional information, such as how much debt they have, will help you determine if they can really pay or not. By running a credit card check, you’ll know how much debt they have.

3. Ask If They Will Have a Security Deposit and First Month’s Rent Ready When They Move-In
Their answer to this question would indicate their current financial situation. Wherein, if your prospective tenant doesn’t have enough money ready, and would request if it’s possible to pay the security deposit after a week of moving in, then this should raise a red flag. You have to think carefully if they can even afford paying the monthly rent. You don’t want to start a tenant relationship with your tenant being indebted to you from the start.

Furthermore, as much as possible, don’t allow a tenant to move-in if they haven’t paid the whole amount yet. Never negotiate or make exceptions, no matter what. Always require your new tenants to settle in full before moving in.

4. How Many People Would Be Living in the Apartment?
Ideally, you wouldn’t want more than 2 people occupying a bedroom. Likewise, the fewer people in the apartment, the less damage it’s going to bring on the property. Aside from that, a lot of municipalities and fire department also have a limit on the number of people that can reside an apartment.

5. Ask Your Tenant If He Has Ever Been Evicted Before
Although there are possibilities that your prospective tenant won’t be 100% honest, it’s still worth trying. Basically, directly asking the tenant whether they have been evicted before could also be beneficial for them as they will be able to explain why it happened. Keep in mind, even good folk’s fall on hard times, and don’t let the eviction fully disqualify them. However, you should also be wise enough and weigh if you really should give them a shot.

Finally
Finding a great tenant isn’t as easy as it may sound. However, with the help of a screening process, you’ll be able to learn more about your prospect and it’ll also help you avoid any problems in the long run.

About James Henderson
James Henderson is Director of Marketing and PR for Real Property Management Citywide. James has been working in the real estate industry for over 30 Years.

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