Every real estate investor and property manager wants to make sure they’re renting out their properties to the best tenants. After all, while there are countless people who can meet basic qualifications, especially for affordable and moderately priced properties, it’s also quite common for tenants to be a poor fit, break rules that they don’t think are important, or move on quickly, leaving you scrambling for someone to fill their rental. To put it simply, even when screening tenants carefully, a lot can go awry.
If you’re committed to filling your properties with the best tenants, rather than average applicants, it’s time to upgrade your screening process. These 3 practices can help busy landlords reduce tenant turnover and create a community you can be proud of.
Ensure Payments Are Proportional
While landlords and property managers typically run credit checks on potential tenants and ask for proof of income, they also need to make sure that the rent is considered affordable relative to income. Experts consider housing affordable for a given tenant if it is 30% or less of their income when added costs like utilities are included. The closer a tenant is to that cut-off, the more likely they are to fall behind on their rent or be evicted.
Especially in urban areas, rental properties tend to get a lot of applications, as well as phone calls, emails, and portal messages expressing interest. This can be overwhelming and distract you from the screening process, especially if an applicant makes a good impression on the phone or drops by the office. But, while it’s true that your instincts are valuable when evaluating tenants, you can’t let these “squeaky wheel” strategies distract you from the screening process.
Particularly when dealing with a lot of applications, it’s best not to form any impressions of potential tenants until they’ve passed the basic screening process, and you can speed this up by using an online rental application with automated screening features. By leaving those first steps to the computer, you can narrow down the applicant pool to only those who meet the key criteria – income, criminal background check, references – and then evaluate tenants for fit from there.
Talk To Employers
Many landlords put a lot of emphasis on talking to past property managers, and while it’s true that this is important, it may not actually be the best way to determine whether someone will be a good tenant. After all, other landlords typically only know about the most egregious behavior – being highly disruptive or causing property damage, for example – but they don’t typically have a personal relationship with the tenant. No, if you really want to know if someone will make a good tenant, you’re better off speaking to their employer or manager.
Unlike landlords who tend to have only passing familiarity with their tenants, applicants’ employers know what they’re really like and if they’re not a good employee, they likely won’t be a good tenant. Many landlords skip this step, but you’re losing out on critical information if you do.
Screening tenants can be a lot of work, especially for large, multi-family properties, but it’s important to do it right. The more carefully you navigate the screening process now, the less likely it is you’ll be searching for new tenants again in nine months or a year because things didn’t work out.
By putting in the work on the front end, you’ll reap the rewards in the long-term.