As a property owner or landlord, one of your main priorities has to be securing good tenants to fill your units. It just does. Not only do high-quality residents help reduce your vacancy rate, but they also are more likely to take good care of your property while living there. All this adds up to increased success for your investment.
The challenge is that taking on a new tenant can be a big unknown. How are you to know if they’re going to be a responsible person and pay their rent on time? It’s risky – which is why you want to keep hold of them when you get a good one! Fortunately, there are ways to mitigate that risk by following a thorough tenant screening process.
Here are five factors we always evaluate when screening rental applications.
- Credit history – 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. That’s clue number one that they’re likely to be a good tenant.
- Criminal history – If an applicant has a criminal history, you should steer clear of renting to them.
- Eviction history – The same is true 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.
In addition to screening for these 5 areas, however, you should also be on the lookout for red flags. One such flag is tenant urgency and another is their willingness to pay well above market rate. If you notice either of these, you should heed caution.
To learn more about owning and managing rental properties in the greater Columbus area and to ask your questions about screening applicants, please contact our team at RL Property Management anytime.