It can’t be stressed enough – having high-quality, responsible residents in your properties is paramount to your investment success.
Not only are reliable tenants more likely to respect your property and take good care of it, but they are also more likely to stick around for longer. What’s more, when you retain tenants for as long as possible, you save money by reducing your turnover costs and vacancy rate. You certainly don’t need us to tell you that fewer expenses and more income is always a good thing.
What to Look for in a Tenant Application
The challenge is you don’t always know what kind of resident a new applicant is going to be. Taking on a new tenant is always a risk (hence, why you want to keep hold of them when you get a good one!). The good news is there are ways to reduce that risk and weed out poor-quality applicants from your list.
Here are five factors we always evaluate when screening rental applications.
- Credit history – Good credit is a typically a good sign. The correlation between an applicant’s credit history and their skip and eviction rates has been studied extensively, and there is strong evidence to suggest that using one’s credit report can be highly predictive of their future ability to pay rent on time month after month.
- Criminal history – If an applicant has a criminal history, you should steer clear of renting to them.
- Eviction history – Same goes for eviction history. If someone has recently been evicted, they’re likely not going to be a good resident.
- Rental history – Talk to the applicant’s current and previous landlord to see what kind of tenant they were, if they paid their rent on-time, didn’t leave with a big balance, or didn’t damage the property in any significant way.
- Income – Verify income by looking at pay stubs and bank statements. To qualify for a specific rental property we manage, the applicant needs to show a combined monthly household income of at least three times the cost of rent.
The better job you do at screening tenants, the more likely you’ll secure responsible residents who choose to stay in the property for an extended period of time while also taking good care of your property.
To learn more about owning and managing rental properties in the greater Columbus area and to ask your questions about screening applicants, please get in touch with us at RL Property Management anytime.