Real Estate Agent · Newport · Member since 2020 · 4 posts · 6 votes
4y
Hey Lorraine,
Since I work in California where tenants have more rights than owners, we go through a tedious process that ensures the safety of us, the managers, and the owners themselves. Here are all of the steps we take to ensure that we get proper tenants who won't land us in an evictions court:
1. We use Transunion which provides / runs the credit, criminal, and background report for each and every applicant over the age of 18. Once that is received, our operational manager manually checks each report (as to avoid conflict of interest) and looks for indicators of pay day loans, collections, high debt to income, and basically anything else that would suggest future default on a rental payment. Then the criminal and eviction report is checked and the only way we would let a criminal report slide is if there was like a speeding ticket of something miniscule. Even then, we STILL call and question it. We are non-negotiable on evictions and deny all who have one.
2. After the tenant is conditionally approved through the screening, we do landlord, income, and employment verification. This means that the operational manager calls ever single reference provided and asks questions like, "would you rent to them again", "are they good stewards of the home", "have they ever defaulted on a rent payment", For employment, we would pretty much ask the same things.
3. Once that is done, we ask for w-2's, 3 months worth of paystubs, or if they are business owners, 1099's / income tax returns. This is to ensure that their income is at least 2.5 times the rent. We also look for signs of forgery and have an expert who scans each document thoroughly.
4. After all of that, we have an approved applicant!!!
Let me know if this help :) Ask all the questions you need answered. I am here to help!
New to Real Estate · Burlington MA · Member since 2022 · 26 posts · 15 votes
4y
I use a credit score of 700 or higher for anyone who will be on the lease, plus a credit report that lists no collections and timely payments. I realize 700 might be considered high, but in my experience, it's worth holding out for. My husband has rented to folks with lower scores and often has issues. I get many cases where one person has great credit/income but their partner has very poor credit/income. I call prior landlords as references. You need to have them authorize you in writing typically for employer verification, but getting recent paystubs/bank statements suffices for me. Another person on BP recently cited https://www.theclosingdocs.com for income verification.
Real Estate Agent · Member since 2022 · 40 posts · 6 votes
4y
Hey thanks! So if you get 10 different people interested, what do you typically say to those that apply and aren’t meeting your requirements? Like with the lower credit score or background report red flags?
Denver, CO · Member since 2022 · 200 posts · 77 votes
4y
I normally run a tenant screening check through TransUnion's SmartMove. This does the credit, background, and rental check for you. You can of course ask additional questions during the initial application process too.
Assuming background check and credit check are free of evictions or criminal record and credit score is decent, I seem to uncover the biggest red flags through talking to the applicants while showing the property. Keeping it light and asking open-ended, people give out all kinds of information. Once an applicant told me that they were in the process of being evicted from their current apartment for not maintaining clean living standards and that eviction didn't even show up on her report because they had just started it. As for the rejected applicants I mention during the conversation that we have had a lot of applicants. Then later when I have to respond to I just tell them we went with another applicant.
Real Estate Agent · Newport · Member since 2020 · 4 posts · 6 votes
4y
Hey Lorraine,
Since I work in California where tenants have more rights than owners, we go through a tedious process that ensures the safety of us, the managers, and the owners themselves. Here are all of the steps we take to ensure that we get proper tenants who won't land us in an evictions court:
1. We use Transunion which provides / runs the credit, criminal, and background report for each and every applicant over the age of 18. Once that is received, our operational manager manually checks each report (as to avoid conflict of interest) and looks for indicators of pay day loans, collections, high debt to income, and basically anything else that would suggest future default on a rental payment. Then the criminal and eviction report is checked and the only way we would let a criminal report slide is if there was like a speeding ticket of something miniscule. Even then, we STILL call and question it. We are non-negotiable on evictions and deny all who have one.
2. After the tenant is conditionally approved through the screening, we do landlord, income, and employment verification. This means that the operational manager calls ever single reference provided and asks questions like, "would you rent to them again", "are they good stewards of the home", "have they ever defaulted on a rent payment", For employment, we would pretty much ask the same things.
3. Once that is done, we ask for w-2's, 3 months worth of paystubs, or if they are business owners, 1099's / income tax returns. This is to ensure that their income is at least 2.5 times the rent. We also look for signs of forgery and have an expert who scans each document thoroughly.
4. After all of that, we have an approved applicant!!!
Let me know if this help :) Ask all the questions you need answered. I am here to help!
Show full credit report, no late payments, Credit 750, 4x income to rent(each applicant), no evictions, must have a garnishable income, 1 yr on job verified, show pay stubs, references from two landlords, allow inspection of their present home. No pets.
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
4y
Depends what my neighborhood looks like. I don't like to do anything under 600, income 3x the rent, 3 previous landlord references, and a background check