The kind of tenants a landlord gets can decide his success or failure in this business. As a landlord, it is always your desire to have well mannered tenants who pay their monthly rent on time. You also want good tenants to stay for a long time in your rental property. One thing that can help you in achieving your objectives is a tenant screening system. By putting in place a high quality tenant screening system, you can ensure that there is no bad fish in your pond.
First know about the criteria that you cannot use
You need to be careful in devising a tenant screening system. It should not be discriminatory in nature to land you into legal troubles with the authorities later on. This system should make use of criteria that are applied uniformly across all tenants and they do not discriminate among them on the basis of religion, race, gender, age, marital status, and disability. For example, you cannot reject the application of an individual solely on the basis of his religion or race. This gives you an idea of what criteria you cannot choose in your tenant screening system even if you have some stereotypes in your mind. Never make the mistake of denying tenancy saying you are black or you have too many kids in the family. You can find yourself in legal trouble if the applicant decides to drag you in a court of law.
Monthly income can be a good criterion
If you cannot reject the application of an individual on the basis of above mentioned grounds, what options do you have? Well, your sole concern is getting rent on time and the income of the applicant is the best way to judge whether he will keep paying his rent on time or not. Many landlords fix 30% as the upper limit to the ratio of their monthly rent and the monthly income of the household of the applicant. You are free to set your criterion in this regard and you can even reject applications where the monthly income is less than 4 times the monthly rent. After all, it is your property and it is your prerogative to set the criterion for income levels that you feel is suitable to pay your rent comfortably.
Employment history reveals a lot
Some landlords pay great emphasis on the employment history of their applicants. They feel confident when the applicant has not been switching jobs lately. You can also ask for good references from the applicant form his workplace to be doubly sure of his antecedents.
Stay away from individuals with a criminal background
Beware of all applicants having a criminal background. You can strictly impose this as a criteria in your tenant screening system and bar all applicants with any kind of criminal background form your property. You should not take any chances with someone who has been arrested or booked on grounds of cheating or forgery before.
Set lower limit of credit score that you can accept
One criteria that is used invariably by all landlords is the credit score of the applicant. The credit score of the applicant is generally reflective of his trustworthiness. The higher the score, the more trustworthy the applicant will prove to be. You can set a credit score limit below which you will not entertain applications for tenancy in your property. However, some applicants may prove to be good tenants despite having a low credit score because of a financial problem in recent times. You can consider application of such individuals.
You can also make use of tenant history to know if the applicant is going to be a good tenant or not.
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.
