The 7 Step Checklist for Finding (and Keeping) a Great Tenant
One of the most common questions we get from landlords is, “How should I qualify an applicant for my rental property?” After marketing the property and attracting prospective tenants, what areas should you look for to identify a quality tenant? A good tenant is someone who pays his or her rent on time and takes care of your property; if you have this, everything else is much easier. Here are the seven essential areas to research when it comes to making a decision on a prospective renter:
- Rental History
As a landlord, your goal is to find a tenant to stay in your property long term. When researching rental history, talk to current and past landlords to find out how long they stayed in their previous units and what their payment history was. Talking to references from before their current landlord can sometimes lead to more truthful responses as a past landlord has no reason not to be honest about the tenant, though a current one might if they want the tenant out.
- Credit Check
Credit is an essential consideration when it comes to screening a prospective tenant. It is a key indicator of their likelihood and ability to pay their debts, such as rent and utility bills. TransUnion releases a report that researches 15 million tenant records and shows that when renters have credit scores between 600-699 and a fair rent to income ratio, eviction rates sit around 2.2%. When the credit score drops to a 550, eviction rates jump to 5%. Information like this is vital for landlords evaluating applicants.
- Criminal Background
You as the landlord have a choice to make, but the best advice we can give is to have high standards when determining what you will allow in your property. Understanding what qualifies as a misdemeanor or felony is imperative when making this decision so doing some further research is advised.
- Eviction History
You do not want to rent your property to someone with an eviction in their history! Filed evictions against an individual should be an immediate indication to resume your search.
- Sexual Predator Background Check
It has become easier to look into someone’s background and find out if they’re a registered sex offender, an important consideration when evaluating a prospective tenant.
- Income Verification
People aren’t always truthful on the income portion of their rental application. As a landlord, you should verify the prospect’s income and make sure it fits your rent to income ratio criteria. Generally, 35-40% rent to income is common to ensure the tenant can afford the rent.
- Pet Verification
If the applicant meets your criteria on all of the other factors and has a pet, verify what kind of animal they have. Get a photo and a pet addendum in place to keep on file. Not sure if you want to allow pets at your property? Check out this post: Should I Allow Pets? 5 Considerations for Landlords.
While this doesn’t guarantee a perfect tenant, by going through this screening process you as the landlord are showing you have high standards in place. You’re also greatly mitigating your risk of entering into an adverse relationship with a low-quality tenant. All of these factors together should be put into a criteria model for scoring prospects and helping identify the highest-quality prospects in your pool.
Have questions? Give us a call, 303-255-1990.