As of 2016, almost 37 percent of households in America were occupied by renters. That may entice would-be landlords to consider jumping into the market and buying property to rent, but making money from rental property can be challenging. Many landlords lose money, and although there are some other reasons why landlords may fail to turn a profit, often the reason is because of poor tenants.
Carefully screening prospective occupants can help ensure that you are paid regularly, you don’t incur costs from negligence to the property, and you aren’t burdened with complications. There are a few critical steps you can take to simplify the screening process, and they’ll help ensure that you make the right decision about who you rent your property to.
Source: irafinancialgroup.com
Credit checks
Before you rent a property to someone, you want to be sure that you’ll be paid on time. Running a credit check is one way to determine if a person has a history of leaving bills unpaid. This can be a red flag that they’re a potential problem tenant who may fall short on rental payments.
The good news is that running a credit check doesn’t have to be costly or complicated. Nowadays, landlords can take advantage of digital services like a free online rental application that includes running a credit check. The report provides a credit score from a reputable company, as well as a list of factors contributing to the individual’s score.
Criminal records check
A criminal records check can be just as important as a credit check. Individuals with a criminal history may pose unique problems for landlords. They can present threats to the property, and they may cause other prospective rental tenants to move elsewhere. An individual who is choosing between apartments isn’t likely going to choose to move in next to someone who was convicted of burglary.
Obtaining this information doesn’t have to be difficult. The same free software that can secure a credit report for you can often check on an applicant’s criminal history. In some cases, an applicant may be upfront with you about their record and attempt to demonstrate that they are reformed.
In the event that you do decide to rent to them, it is still a good idea to know about their past so that you aren’t caught by surprise later. And this way, you can understand any issues related to their record that may affect their tenancy. For example, an applicant who is on parole may be required to have their apartment available for inspection at all times to ensure compliance with their parole conditions.
Source: Tess Keefe
Personal assessment
A credit check and criminal records check only provide part of the picture. In some cases, those steps alone may be enough for a problem tenant to easily pass your screening process. One way to ensure that bad tenants don’t slip through the application process is to make sure that you obtain a more personal perspective on them.
This involves meeting with rental applicants. How they present themselves can indicate whether they’re tidy or sloppy. Spending a bit of time with them can also give you a sense of whether they’re being forthright or whether they’re holding something back that may be a reason you shouldn’t rent to them.
Source: Property Managers Online
Speaking with references is also a good idea. While prior landlords may have their own agenda when assessing a tenant who is moving, you may be able to get a sense of whether there were legitimate issues with your applicant. Work supervisors are also excellent references, because they’ll know if the applicant is reliable, responsible, and easy to get along with.
Personal references may also share additional information that can help you determine why the individual is moving or if there are other issues that may impact their tenancy. For example, if a few references tell you the person plans to move out of state in a few months, then you may want to consider a different tenant who will be staying local for a long time to come.
