It’s a lot like dating to find a good tenant. The process involves going through a lot of applicants until you find someone who shares your values and you feel comfortable with. You’re not looking for Pina Coladas or long walks on the beaches, but someone who enjoys walking in closets and having a large backyard. Someone who won’t break your heart.
Apart from the hassle of fixing the damage, the wrong tenant can cause major expenses. Tenant turnover can lead to a monthly average cost of $1,750. Extreme situations may require the tenant to be evicted if they refuse to pay rent or engage in criminal activity. It is not only dangerous for your investments and neighbors but also puts you at risk of financial and mental health.
Nobody wants to spend their hard-earned money on legal fees or filing fees, waste time in court appearances, or lose income due to tenant turnover or vacancy. So how can you find great tenants who won’t cause you headaches?
- Tenants Shouldn’t Be Involved In Criminal Convictions
You feel like a landlord and have to protect your property, yourself, and the neighborhood. Landlords might believe they can trust their instincts to choose the right applicant for their rental property. However, data shows nearly one-fifth of the rental applicants that were screened had a criminal record. It means that approximately 20% of potential applicants in the sample have a criminal record. It could indicate that criminal records can be critical information to your decision when leasing.
To avoid letting potentially dangerous tenants in your space, you should conduct an online background check. In addition, it is important to refer to or follow the HUD guidelines (as/where applicable) when screening potential tenants based on criminal histories.
- Tenant Should Have Clean Eviction Record
Quality tenants are the key to a profitable rental business. Renters who fail to pay their rent on time can lead to a loss of income. You need to think about what you can do to protect your rental income. If the tenant continues to default, an eviction is likely.
It is vital that landlords do all they can to reduce the chance of eviction. A single eviction can result in a cost of up to $3,500 for landlords and take anywhere from three to four weeks. Unfortunately, independent landlords are often too busy to handle such a heavy task.
Past evictions can be a great indicator of future risk. Therefore, it’s smart for landlords that they obtain a rental history report to get insight into a prospective tenant’s rental history. Ask prospective tenants to provide a list of their previous addresses and contact information for their landlords.
- Tenant Should Have Good Credit History
It’s becoming more difficult to rent and keep up with financial obligations due to rising rent rates, increasing cost of living, growing student loan debt, and mounting student loans among Millennial and Gen Z renters.
Landlords are concerned about payment problems. Non-payment of rent can lead to difficulty paying your mortgage, business expenses, and bills. It takes time and energy to track down late rent payments. It’s impossible for independent landlords to do this.
You may be able to avoid non-payment by checking the credit history of applicants. It will give you an upfront look at whether they have been responsible for their money in previous years. In addition, independent landlords need to look at the financial history of applicants when screening tenants.
- Credit Score
- Late Payments
- The total amount of debt
- Credit Marks that are Derogatory
- Tenant Should Have Stable Employment and Income
To feel confident that their tenant can pay rent on time and in full, landlords must have proof of steady income.
Industry standards for rent-to-income ratios suggest that tenants should earn three times the rent cost in monthly income. However, this can vary from one state to another. For example, rent is generally cheaper in Montana than it is in Las Vegas, so the “3x rule”, based on the fair market rent in your region, might not apply to you.
Always ask for an estimate of your income when you rent. Check the laws to see if they apply to you, or contact your legal counsel to find out what you can do. But don’t assume that the information is correct.
- Tenant Should Show Respectful Behavior
It is important to find tenants who are respectful of landlords and neighbors. Respectful tenants will be honest with you about maintenance issues and will take responsibility for their own responsibilities when they live in your rental property.
Respectful tenants are more likely:
- Rent on time
- Be sure to follow the lease terms
- Avoid causing trouble for other tenants or neighbors
- Don’t damage your property beyond what is normal wear and tear.
- Communicate politely and in a timely manner
- Tenant Should Be a Good Communicator
Effective landlord-tenant relationships are built on communication. Therefore, consider the communication style of applicants from the moment they reach out to you.
- Are they paying attention?
- Are you quick to answer questions and/or messages?
- Before asking questions, pay attention to the details.
- Are they responsive to requests for documentation?
- Are they able to answer all your questions, or do they avoid asking difficult questions?
- Tenant Should Present Organizational Skills
A great tenant is an organized one. Therefore, focusing on qualified applicants will help you to get rid of uninterested tenants as soon as possible.
Tenants who are organized will be prepared to move quickly. They are prepared with documents and checks and can respond quickly. The organization shows they are serious about signing the lease and will comply with your rental requirements.
Ask interested parties to bring all documentation required to your property showing.
- Completely filled out a rental application
- Report on rental history
- Refer to personal references
Comprehensive Screening Can Confirm Your Tenant Has Best Qualities or Not
The key to landlord success is finding the right tenants with the best qualities. It is a tough market for landlords, with rental housing in high demand. You can ensure that you get the best match for your rental property by conducting thorough tenant screening.
The verification of information provided by tenants is only the beginning. It will confirm whether your applicant has a stable income and an excellent financial history. These are two of the most important qualities that you can look for in a renter.
You can rest assured that your potential tenant will be honest and responsible by conducting a background check. In addition, you have a greater chance of not having to deal with costly problems later on if you accept a tenant with such great qualities.
A potential tenant applicant may appear great on paper. However, you’ll find out if they are the right tenant for you if you spend more time with them.