Looking to rent your property? The following best practices will help you get your ideal tenants. Proper tenant screening can be a tremendous help, when it comes to finding the ideal renters, for you.
- Make sure you’re familiar with Fair Housing laws
Fair Housing laws prohibit discrimination based on race, color, national origin, religion, sex, disability, or familial status. When selecting tenants, it’s crucial to know what you can and can’t do when selecting and rejecting tenants.
If you’re not familiar with your legal obligations, hire a property manager so you don’t have to worry. For example, many Texas investors hire Houston property management company Green Residential to fill their vacancies so they don’t make any mistakes. They get quality tenants and it lowers the risk of lawsuits.
- Define your ideal tenant criteria
Although you can’t discriminate, you can aim to attract the kind of tenants you would prefer to rent to by defining the criteria all applicants must meet. Consider the following:
- Income requirements. This is usually 2x the monthly rent, but some landlords require 3x the monthly rent.
- A stable employment history with no unexplained gaps and current, verifiable employment.
- A credit score of at least 650.
- A verifiable rental history.
- Positive personal references.
- No recent evictions. Some landlords make exceptions if an eviction is around 10 years old.
The stricter your requirements, the better chance you’ll have of getting a good tenant who will pay rent on time and take good care of your property.
- Use your ads to weed out unqualified applicants
Advertisements should be a mix of showcasing the property you have for rent and deterring unqualified applicants from applying. Depending on your state, you might be required to disclose specific bits of information in every ad. In addition to your legal obligations, make sure you list the most important tenant criteria, such as your income and credit score requirements.
- Process applications online
Managing physical applications will be cumbersome. That’s why smart landlords use online applications. It’s easy and fast, and it prevents applicants from submitting incomplete applications because you can require them to fill out every field. You can even require certain form elements to be in a specific format, like dates.
Another benefit of using online applications is that you can filter applications from people who don’t qualify. For example, if someone selects an income level that doesn’t meet your minimum requirement, the system will send their application to a specific folder in your email account to keep your inbox full of only qualified applicants.
- Always perform background checks
You never know who will apply to rent your property, so make sure you always perform a background check on every applicant. You should also require background checks for everyone who will be living in the unit, even if it’s the main tenant’s adult child. Never blindly trust that someone will be a good choice even if you know them.
Keep in mind that you may not be legally allowed to make decisions based on a person’s criminal history alone. However, if they have a conviction that can put other tenants or neighbors at risk, then you should have legal grounds to reject them. For example, someone who was convicted of arson or running a meth lab would potentially put other people’s wellbeing at risk. You also don’t want to accept a sex offender if they’re going to be sharing any common areas with a child or if they aren’t legally allowed to rent from you based on how close you are to a school. To cover your bases, talk to a lawyer about the best way to reject applications in these situations.
- Confirm employment
Applicants can list any employer and salary on their application, but it may not be true. Always verify employment by asking for current pay stubs that display the applicant’s legal name, and call their employer for further verification. You may also want to check the phone number they provide for their place of employment to make sure it matches the company’s number. Sometimes people get sneaky and have their friends pretend to be their employers.
- Verify their rental history
A person’s rental history can tell you a lot about how they will be as your tenant. For example, if they move often, that could be a sign that they either can’t afford the rent, keep getting behind on rent, or they don’t follow the rules. Sometimes people who job hop have to break their lease early, so be aware of that possibility. Always talk to past landlords to get an idea of how an applicant is as a tenant.
Don’t make exceptions with tenant screening
Don’t lower your standards just to fill a vacancy. You could end up with a bad tenant you can’t get rid of easily. Follow these best practices to attract good tenants who will pay rent on time and treat your property as if it were their own.
