Vetting process for tenants: what is must have for good tenants?

Question

I have a couple questions:

What systems In place do you have to determine if a tenant will be a good vs bad tenant?

What are must haves that you have found in good, reliable tenants?

On the contrary, what qualities do you find in poor tenants?

David Brent · Answer

Don't rely on their current landlord. (If they are a BAD tenant - that landlord wants to get rid of them - and will give a GLOWING review!) Ask for the last 2-3 landlords - and FOCUS on the #2 and #3!

Jill F. · Answer

I do a fair amount of low income. We have found that the ability to hold a job for more than a year is the best indicator of a good tenant. Secondly, the ability to successfully complete our screening process, which requires tenants to complete an application before looking at our properties is a good indicator that an applicant will make a good tenant-- (we are able to be successful with this requirement because we generally have the nicest properties at a given price point/neighborhood, we offer alternatives for 'less than perfect' credit, and we'll at least listen to the story for tenants with 'issues' (one eviction or criminal offense) and let them know in advance if it's worth their time to apply).

Bjorn Ahlblad · Answer

@Mohamed Fakih this subject is as long as it is broad. I suggest you do some searches o here and read Brandon Turner's book on 'Managing Rental Properties'. All the best!

Calvin Ozanick · Answer

Placing tenants is definitely a process, I have found that you need to be very diligent in every step of the process for placing tenants. One simple thing we have done which has gone a long way is the following:

We charge for our initial application and our background check separately. If tenants have a bounce back or do not pay for either of those that is an immediate red flag.

When looking at a background check, we are always careful to look at dates of any flags, and we also review the credit report to see how many on time vs late payments they have on their credit accounts.

Lastly, this is a people business. You need to have a good way to read people and if you cannot do that, you could find yourself in trouble. As you get more experience, you will get better at it, but you need to know how you feel about a person from your few initial meetings.

Dan Farber · Answer

1. Proper application needs to be filled out by the tenants over 18 years old. Here is a good starting point but I ultimately recommend your legal to create and review. https://ipropertymanagement.co...

2. Income verification - You want to create a multiple of rent as a qualifier. For example, 3.5x the month rent. If rent is $1000, they need to provide income proof of $3500 each month gross. I like to ask for pay stubs within the last 60 days. If they do not meet this, you can opt to charge a higher deposit from the standard. When it comes to offer letters, make sure there are no contingencies to start the job.

3. Screening - With the application completed and signed and income verification step completed, you will have everything you need to pay for a screening. Most times, the application fee you will charge will be more than the cost of screening. Let the screening company make the decision for you, due to Fair Housing laws, your decision should be unbias and based on your application criteria. This way you are protected from any claims.

4. Deposits are a great filter. On some of our properties, we ask for the application fee and deposit in order to hold a unit. The deposit is refunded if the tenant cancels within 48hrs of application or denial. This setup brings the more serious applicant.

You are on the right track asking these good questions.

Sarah T. · Answer

When looking for a quality tenant, the two most important things are

1. Paying rent on time - vetted through income verification and credit check

2. Not destroying your house - vetted through references, preferably prior landlord references and criminal background check

Distant third, and only after the first two are met, is length of tenancy. It is always better to have a good tenant in place for years and years rather than 12 months. This is also on you to be a good landlord and charge market rents.

David Brent · Answer

To clarify - a typical apartment rental application includes asking for current residence (rent or own), as well as contact data. (e.g. address, amount of mos rent, move in, move out date, and name of landlord.) Typically, (just like for employment) the application asks for current AND PRIOR residences. I am simply saying to look BEYOND their current residence, and be sure to reference check the prior one too. Also - be wary of any gaps in their residence history where they may be omitting a landlord they had a bad experience with... If you google apartment application, there are lots of forms that show the form asking for prior lease history...

Michael Noto · Answer

First and foremost does the applicant have suitable income to afford the apartment? Typically 3x the monthly rent in take home income is the bar there.

Once that is verified, we put the biggest weight on not only raw credit score, but the actual report.

Lastly, any applicant with previous evictions or a violent criminal background are a complete no go right from the start.

Lesley Resnick · Answer

I would contact the landlord they currently rent from. If you buy the property and they are in a lease, you are largely stuck with them for the term of the lease. Unless they don't pay and or trash the place.

There is no exact science to this. If the tenant is motivated to lie, it would be difficult to catch. I will give you my brothers number as my employer and my friends number as my landlord. It is only a matter of time before you run into a situation, where the tenant lied or there was a straw man renting the place for someone else.

You will find the commercial landlords are tougher to get information from. They need to deal with fair housing and privacy. The smaller the landlords are more more likely to share detailed information. I have never had another landlord lie to me, just to get a tenant out. I find it unlikely you will run into that situation.

Questions I ask:

How long have they lived in that location

Have they ever been late?

Were they evicted?

Is there any reason you can think of that would make me not want to rent to them?

Mohamed Fakih · Answer

@Erik Hatch thank you for your response!

Vetting process for tenants: what is must have for good tenants?

Vetting process for tenants: what is must have for good tenants?

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