Today we’re talking about tenant screening. The single most important thing you can do as a landlord is to find the highest quality tenant in the fastest amount of time. The key factors to excellent tenant placement are effective marketing and effective tenant screening. Without a great marketing strategy, you won’t have enough interest from potential tenants to screen well. Without a thorough screening, you’ll get someone in the property who may turn out to be a mistake and then it’s too late.
You need a marketing plan that produces a good pool of potential tenants and then you must be disciplined and uncompromising in your screening process. There are four components to a detailed tenant screening.
Credit and Criminal Check
The first part of the screening process is a check of credit history and criminal background. If you choose not to work with a professional property manager, there are services online that can provide you with these vital reports. Don’t trust your instinct and don’t think you know a person’s character just by meeting them. Get all the documented information you can.
Income and Work History
Make sure what the tenants put in their application is accurate. Call their employers and get a verifiable work history of between 12 and 24 months. Pay stubs are great to verify income, but you also want to talk to employers so you know your tenants work. Lead with a question like: “Jane Smith listed you as a reference on an application for a home. Can you tell me how you know Jane?” If the applicants used one of their friends or family members as an employment or a former landlord reference, this type of question might trip them up and get you more accurate information.
Make the necessary phone calls to get an accurate sense of your applicant’s rental history. You don’t want to cut corners here. It’s important to know what kind of tenant this person has been in the past.
Cash for Move In
Good tenants will have the cash they need to move into your home. Don’t let someone limp in with half a security deposit or a partial rent payment. I own rental properties myself, and early on in my investment career I was burned this way because I was desperate to get a vacancy filled. It’s essential that you collect a full month’s rent and a security deposit before the tenant moves in. Our practice is to pro-rate the second month when necessary. If a tenant moves in on the 15th of the month, we collect the first month’s rent in full and then pro-rate the second month.
Do these things effectively and you’ll have well-screened tenants. If you have any questions, please contact us at Mark Brower Properties. We’d be happy to be a resource for you.