Once you have decided to get into the real estate business, more often than not, you’ll look to rent out your property because it ensures stable cash flow. However, renting out your property isn’t the easiest task, and you should know the basics of how to screen a tenant.
In fact, if you don’t know the right questions to ask potential tenants, you may end up with troublesome or incompatible tenants creating problems for both parties in the near future. To save you from this headache, we’ll cover some essential tips you should consider when screening tenants.
Five tips for screening tenants
See how to screen a tenant thoroughly with these vital steps.
1. Do relevant identity verification
Your security comes first. While this point may not directly relate to your business or the money you’ll make from it, it’s always helpful to know the people you’re allowing to live in your property. You might want to look into their past financial records and other relevant documents if you have any doubts about the applicant. They might have large amounts of debt or criminal histories that can complicate things. Simple verification via their SSN or Driver’s License can save you from legal or personal security issues in the future.
2. Use a rental application
A rental application is not required by law, but it is an essential document when renting out your property. It helps your conduct a short screening of the tenant’s eligibility before paying for a background check.
The application can help you determine:
- How much the tenant can afford
- Who will be living with them
- A copy of their renter’s insurance policy
- If they have pets
- Their employment status
- Expected move-in date
3. Check past renting records
Be sure to include a section on your application that asks for references. The applicant should give you the contact information for their current and past landlords. Talking to previous landlords may be the best way to understand if the applicant will be a good tenant. Ask questions about noise complaints, legal issues, failure to pay rent, and more. Think of the worst-case scenarios so that you can prepare yourself. A tenant might look good on paper, but their landlord may have information that can change your mind.
4. Face to face interviews
In this digital era, people sometimes undermine the importance of interacting with others in person. Even more so in this business, you need to have a good understanding of your potential tenants. There’s no better way to get to know them than meeting the applicant in person and communicating your expectations. This action alone can save you heaps of trouble. We suggest taking the edge of this task by meeting your prospective tenant at the unit that is for rent. You can tour the space and gauge their likelihood of being a reliable renter at the same time.
5. Proof of income
Be sure to review the applicants financial habits. By requesting the last 2 months of bank statements and income statement, you can verify their listed income is accurate. It also helps to know if these applicants are living paycheck-to-paycheck or if they have savings. Tenants can have unexpected bills during their occupancy: medical, car maintenance or even unemployment. While every landlord prefers tenants with high income and savings, make sure to apply realistic expectations for the class of your rental.
Where can you get screening services?
Burbz boosts your property management abilities by providing software tools to help maximize your profits and minimize your time. We offer free background reports and credit checks for landlords, applicants pay. Click here to learn more about our screening reports.