One question often disturbing potential landlord is whether they can pick good tenants for their properties or not. Experts believe there is no way of knowing you have picked an ideal tenant, but you can certainly increase the likelihood by putting in place a tenant screening process. This is because you know something good or bad about a tenant only after he has moved in and lived in your property for some time. Once you know his track record of rental payments and social behaviour, you cannot say whether the tenant is good or bad.
Tenant screening
There are many aspects of tenant screening that vary depending upon the type of property, the kind of landlord, the housing market, and the regulations imposed by authorities. Tenant screening should be through and proper as allowing even a few bad tenants into your property can prove to be very costly in terms of lost rents, damage repairs, and above all, money and tons of stress. It is in your own interest to avoid allowing bad tenants entry into your property.
Before anything else, read all federal and state level laws on fair housing. Then go about writing your own criterion's to carry out tenant screening.
During 1960’s, Federal government passed certain laws to protect certain classes of people from discrimination According to fair housing laws, a landlord cannot discriminate based on color, religion, gender, nationality, and the marital status of the applicant. State governments have added classes to these basic classes to make the laws even wider in scope. It is better to consult your state fair housing laws to avoid violation of its provisions. You cannot deny tenancy just because someone is a Jew or because he has large number of children in his family.
Developing criterion's for qualification
You must make qualification criterion's that have an impact upon applicant’s ability to pay the rent. You can also develop criterions pertaining to care and maintenance of your property. Here are a few examples to tell you how you can make rental qualification criterions.
You can set a salary limit of greater than three times the monthly rental as a qualification criterion
He should not have been evicted by a landlord in the last 5 years
Set credit score limit that you are comfortable with
He should not have committed a crime in the last 5 years
He should be respectful to others
He should be neat and clean
He should speak truth, always.
Some of these criterion's are measurable while others are subjective in nature. Higher salary or good credit scores can be traced but they cannot be a guarantee of a good tenant. You cannot say with certainty that a tenant is decent and respectful. Who knows he might be behaving nicely just to impress you.
Getting your rental qualification criterion's printed on a piece of paper and getting the consent of the applicant to all the points means you can use the document against the tenant is he violates any of the terms. Also, having all criterion's written in black and white mean you cannot tweak any of them to give entry to someone who is a friend or known to you. The point here is to show consistency so that no one can claim he has been discriminated against.
Tenant screening program is no guarantee that you will only pick good quality tenants who behave nicely and pay on time. But having such a process in place in a good protection against bad tenants as it nips the bud in time.
If you’d like to talk more about property management, or you need help with Everest Property Management, please contact us at Everest Realty.
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As a top producing Realtor and Property Manager; Terry specializes in sales, extensive construction homes, rentals, REO’s, short sales, and all aspects of Real Estate. After graduating the University of Michigan with a master in MBA, Terry continued his endeavor and now has over 15+ years of experience in the Real Estate world. If there is anything that has to do with Real Estate and sales, you can always be sure of Terry to provide important, specialized knowledge.
