Screening Tenants on Your Rental Properties
If you are an owner of a rental property, having an effective tenant screening procedure is a necessity to have. It is the best way to select a good and responsible tenants and avoid having bad tenants. For having a bad tenants is what makes a rental property suffer losses and lower its cash flow due to late or non-payment of rent and causing damage to your propperty.
There are many ways how to screen tenants and here are a few:
1. State a clear list of expectations of what your tenant should be
Usually at the start of searching a tenant, be clear on your advertisments on what kind of tenant you are looking for such as only male or female tenants, a small familly tenants with five (5) number of occupants and so on. You can also add nationality or religion or even having pets or not, it will totally depend on you preference as a land-lord. By the way, this is not about descrimination when we add religion or nationality on the selection because every owner has the the right to do so in their selection process. My best suggestion is just to be discrete on it.
When you already have have a prospective tenant, do your interview as land-lord. Have your list in mind, check the boxes if this new tenant is qualified or not. Don’t just accept directly because you are in need of a tenant. It will save you more cash if you have selected a tenant that fits for you.
2. Ask for a proof of income
I know this is shocking. It is unusual to ask for a proof of income for someone who is just renting. But to tell you frankly, this will help you a lot on not having a tenant who tend to have late payments and non-payments. By looking on their income you can gauge if this prospective tenant can pay rent on time. You should avoid tenants whose income is lesser than three times the rental price.
In cases like they cannot provide a proof of income or you don’t want to ask for proof of income because you don’t have the guts to do so, simply by asking where they work, their position at work and for how long have they been in their work can atleast ease those worries of having a late payer tenant. Job stabilty is a good sign of a right tenant for you.
3. Interview past land-lords.
This is the best way to screen prospective tenants. Ask them for contact details of their previous land-lord, and do some interview. Ask questions to their former land-lord if this prospective tenant has a good history with them. Whether they are timely in paying rent, able to take good care of the property, whether they are troublesome, and how do they relate to neighbors or other tenants.
Final Thoughts
Having good tenants will also attract more good tenants, so make sure that you discuss it well with your property manager or your real estate broker or someone you hired who is experienced in running rental properties to plan out an effective tenant screening process. For good tenants are assets while bad tenants are liabilities.