Are you a property investor looking to expand your portfolio?
Every investor faces the dilemma of how to choose the right tenants to manage their rental properties. Although this process can be challenging, understanding it can prove to be invaluable to your success.
By following these steps, you can effectively screen tenants and find the best ones for your investment portfolio.
Let’s explore the process of tenant screening.
Set Your Requirements
As a landlord, you will want to make sure you are always screening your tenants to ensure you are renting to only the best possible candidates. The first step in screening tenants is to set your requirements. You should make a list of must-haves and nice-to-haves to help you weed out any applicants that do not meet your minimum standards.
Request an Application
As a landlord, you should always request an application from potential tenants. This way, you can get a better idea of who the tenant is and whether or not they would be a good fit for your property. There are a few reasons why this is important.
An application will usually include basic information about the tenant, such as their name, contact information, and employment history. This can be helpful if you ever need to take the tenant to court for unpaid rent or damages to the property.
It also gives you a way to contact the tenant if there are any problems with the rental property. For example, if the tenant doesn’t pay rent on time, you can reach out to them and try to work out a payment plan.
By having an application, you can screen tenants more effectively. This means that you can look for red flags, such as a past eviction or criminal record. This can help you to make a more informed decision about whether or not to approve the tenant.
Run a Credit Check
Running a credit check will give you a good idea of an applicant’s financial responsibility and whether they are likely to pay rent on time. Credit checks can be conducted online and are relatively inexpensive.
Be sure to review the report carefully, looking for any red flags such as a low credit score, late payments, or collections. If you have any concerns, you can always ask the applicant for an explanation.
If you are not comfortable conducting these screenings yourself, you can always hire a property manager to do it for you. Property managers from reedyandcompany.com are experienced in screening tenants and will be able to find the best possible match for your rental property.
Run a Criminal Background Check
When screening potential tenants for your rental property, one important step is to conduct a criminal background check. This will help you to feel more confident that you are renting to a responsible, upstanding individual.
To run a criminal background check, you will need to request a copy of the individual’s criminal history from the appropriate law enforcement agency. You can check the person’s criminal history by doing a search online, or by contacting the local police department.
You can then review this information to look for any red flags that may indicate that the person is not a good fit for your rental property. Some things to watch for include a history of violence, drug use, or theft. If you have any concerns, you can always follow up with the individual to ask more questions or get more information. That said, you may need an additional help to run a thorough criminal background check of your tenants. For example, if you’re located in New South Wales, you can use something like an ACIC accredited police check NSW.
Contact the Previous Landlords
If you are looking to screen potential tenants for your rental property, one important step is to contact the previous landlords. This will give you some insight into the tenant’s rental history and whether they have a history of not paying rent on time, causing damage to the property, or any other red flags. Be sure to get in touch with at least the past two landlords to get a well-rounded view of the applicant.
Contact the Tenant’s Employer
When screening tenants for a rental property, one important step is to contact the tenant’s employer. This can help you verify that the tenant is employed and able to make rent payments.
To do this, you can request a letter from the employer or call the human resources department to verify employment. You can also check with the Better Business Bureau to see if the employer is reputable.
Interview the Tenant
As a property owner, you have the right to interview any potential tenant who expresses interest in renting your home. This can be done in person or over the phone. This is your opportunity to get to know the applicant and to determine whether they would be a good fit for your property.
During the interview, be sure to ask questions about the applicant’s current living situation, job, financial stability, and rental history. You should also ask why they are interested in your property and what they are looking for in a rental home.
By taking the time to interview your potential tenants, you can help to ensure that you are making the best possible decision for your rental property.
Use a Tenant Screening Service
A tenant screening service can help you find the best possible tenants for your property. This will help you avoid any problems down the road and make sure that your property is in good hands.
When looking for a tenant screening service, be sure to check reviews and compare pricing. Once you’ve found a reputable service, you’ll need to provide them with a few key pieces of information about your rental property and tenants. This includes the rental address, the amount of rent, and the length of the lease.
The screening service will then run a background check and credit check on each tenant. They will also verify their employment and rental history. Once the screening is complete, you’ll be provided with a report that will give you all the information you need to make an informed decision about who to rent to.
Thoroughly Screen Tenants to Safeguard Your Investment
While there are many different factors to consider when screening tenants for a rental property, the most important thing is to be thorough. By taking the time to properly screen tenants, you can help ensure that your property is in good hands.
For more tips, advice, and how to make good money renting out a rental property, check out our other blog posts.
