The moment you realize “THE TRUTH HURTS”
Eviction rates can be as low as 1% which seems like a small number. However, this can dramatically change from one location to another with some cities as high as 16% or higher in the post Covid-19 era.
We never want to go thru an eviction process for neither moral or financial reasons. Evictions are a real possibility in your rental property.
If you ever had to evict a tenant you can’t help but realize the TRUTH and it sometimes HURTS!
The Truth of the matter is improved screening reduces turnover and helps prevents evictions.
In a Sea of potential Tenants for your rental property. See what landlords and property managers are doing to conduct the RENTAL SCREENING process.
It can be a painful experience when you have the wrong tenants living in a RENTAL PROPERTY you own. From deliberately damaged kitchen fixtures to delayed rents and rude tones, you can expect every bizarre thing coming your way.
It is not easy to own a property as one must save for years. Therefore, making sure to select tenants who can keep it up and live in an organized way is ever more important.
Here are some steps you should consider while screening tenants.
It’s important that you understand and follow Fair Housing Laws in your area. It is illegal and morally wrong to discriminate on Sex, Race or Color, Religion, National Origin, Familial status or Disability.
1. Pre-screen to save time and money.
A pre-screen will save you time and money, start by letting them know you need some questions answered before you are ready to schedule a showing. See an example pre-requisite questionnaire.
2. Get an application form filled by each tenant
It is important to get everything documented when you are renting your property. Start by getting a tenant application form filled by every applicant. It should cover integral information which can help you in getting specific information about the person.
- Gathering employment-related information is important. A tenant would only be able to pay rent on time if they have stable employment. They should be required to provide the name of the employer, position, salary, employment tenure, and other details. From this you can confirm a clear picture of financial stability. In addition, we found that most landlords look for an income level of 3 times rent.
- Requesting Proof of Income in way of check stubs and bank statements are good ways to prove income and better understand spending habits
- Do you need to check the credit history of potential tenants? The answer to this question is yes. Having a lot of debt reduces the chances of paying the rent on time. In addition to that, if the credit history is bad, it gives the impression that the individual is not responsible. Renting your property to such a person can be risky, however low scores don’t necessary mean a bad tenant. People fall on hard times and it takes a long time for credit scores to rebound. Credit scores are part of the reason rentals are so popular. Some Landlords look to ensure that the rent plus other monthly debt does not exceed 50% of income. If a tenant has a low credit score, look at the report to determine if there are any recent missed payments within the last year and get explanations on missed payments.
3. Criminal History & Background Checks
Trusting someone based on word of mouth without proper investigation can be risky. A potential tenant appearing civilized may have a criminal record related to theft, forgery, extortion, or any other crime. Above all, renting out your property to such a person can risk the lives of neighbors.
These reports are important but they are not the end-all be-all. Some landlords have reported that some of their best tenants had felonies however multiple offense year after year patterns should raise a flag. I personally veer away from records with aggressive/physical offenses.
4. Getting in touch with previous landlords
Why has a tenant moved out of his previous residence? The reason provided to you may not be truthful at all. Some tenants run away with outstanding rental sums or after damaging the property and not paying for it. Such incidents can be harsh for landlords. Here is what you can do to prevent them.
- In the application form, provide fields for gathering information of previous landlords. Get in touch with them to attain confirmations about the information provided to you. One of the questions you should ask is related to timely payments. Inquire whether the tenant had paid the monthly rent on time or not. Past habits of late payments could very well repeat themselves.
- Some tenants have very irritating habits like playing music loudly or creating too much noise. If you rent out your property to such a person, be prepared to receive lots of complaints from the neighbors. As you are the property owner, it would be your responsibility to ensure that people living around your property are not inconvenienced.
- A couple other questions you should ask is if they are in the process of currently getting evicted and what are their current rent payments.
- Don’t just stop at existing landlord, talk to the previous as well. Remember existing landlord may be motivated for the tenant to move out and not be truthful. One way to learn if the landlord is being truthful is to ask them to confirm a range of details to ensure the landlord and the tenant’s stories line up.
Prior Eviction Checks can be implemented via credit reports, Tenant Screening, previous landlords, and court records. Evictions generally are removed from public records after 7-10 years.
If your renter applicant meets the initial prerequisites, meet them in person to really get a feel. For instance, some landlords have reported purposely leaving something behind in their car so they can look into the potential tenant’s car. Messy Car Messy Unit!
Or even passing by their existing house to check how well they will keep the place.
Summing it Up
Selecting the right tenants is crucial to your bottom line. Turnover not only affects rent but also the value of your property. Setting up these prerequisites gets you back to working on your business instead of in your business.
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