IN THIS BLOG:
- Find a good tenant that will pay rent on time and take care of your property.
- Seven criteria areas to research with applicants.
- What if someone I want to rent my property has a criminal record?
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.
Seven essential areas to research regarding prospective tenants:
- 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 prior landlords can lead to more truthful responses, as current landlords may be more motivated to have their current tenants move.
- Criminal Background
We recommend setting high standards when determining what you will allow in your property. Understanding what qualifies as a misdemeanor verses a felony is imperative when making this decision, and doing some further research is advised in order to set good standards.
- Eviction History
Do not rent your property to any tenant with an eviction in their history. Filed evictions against an individual should be an immediate indication to resume your search.
- Sexual Predator Background Check
The process to look into a potential tenant's background by checking registered sex offender lists has become a fairly simple one. This is an important consideration when taking tenant applications.
- Income Verification
Not all tenants are truthful on the income portion of their rental application. As a landlord, take the time to verify the prospect’s income and make sure it fits your rent to income ratio criteria. Generally, a 35-40% rent to income ratio is common to ensure the tenant can afford the rent.
- Pet Verification
If the applicant meets your criteria on all other factors and has a pet, verify what kind of animal they have. Request a photo and establish a pet addendum 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.
- 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 released a report that researched 15 million tenant records. This report revealed that renters whose credit score is between 600-699 with a fair rent to income ratio have an eviction rate of 2.2%. When the credit score drops to a 550, eviction rates jump to 5%. This information is vital in evaluating potential tenants.
While these seven considerations don't guarantee a perfect tenant, they establish a screening process for you as the landlord that demonstrates high standards. You also greatly mitigate your risk of entering into an adverse relationship with a low-quality tenant. All of these factors create a criteria model for scoring prospects and helping identify the highest-quality prospects in your pool.
QUESTION: I own a rental home in Northglenn. Can I refuse to rent to anyone with a criminal history?
ANSWER: Be careful! HUD has new 'guidance' that says you may be guilty of illegal discrimination by refusing to rent to anyone with a criminal history. Instead, HUD recommends you take into account the nature of the crime, the severity of the crime, and the length of time since the crime was committed. Contact a Northglenn property management professional or a local fair housing attorney.