According to recent studies, more families are renting than there have been in fifty years. This means the market is incredible for those who are landlords.
The key to being a successful landlord largely has to do with the tenets you have living in your properties. The wrong choice can make every aspect of your job much harder than it needs to be and can cost you a lot of money in the end.
That's why screening renters is so important for every single landlord across the country. We've compiled a list of the top six things you should focus on when finding renters.
1. Verify Identity
The first step in finding a new renter should always be to verify their identity and make sure they are, in fact, a real person and who they say they are.
Unfortunately, in today's world, there is an abundance of scams and dishonesty. You don't want your business to become prey to someone involved in those kinds of actives. So finding out if the applicant's information is accurate and correct is a critical first step to protecting yourself.
It's also very helpful to run a background check for everyone who will be living in the home. This allows you to understand their background history and any prior citations or run-ins with the law.
Sometimes it can feel like an invasion of privacy to look into all this information about someone, but you can't make an informed, smart decision without it!
2. Good Financial Standing
Beyond understanding if your potential renter is a criminal or not, it's most important to know if they have the ability to pay you rent every month. Without that rent, there's no reason to be a landlord as you won't be making any money.
During your resident screening process, a credit score check should be run for every adult.
This report shows the applicant's financial history and how stable they are. It's also helpful to get accurate, up-to-date income information to get a full picture of how secure they are and if they can afford your rental rates or not. Before you even begin screening, you should set parameters for what a renter should meet in order to be approved.
3. Space Fits Needs
As you interview potential renters, it's good to get a full understanding of what they're looking for in a home as well. You can ask questions like how many people will be living in the space, how long they've lived in the area, and what their future plans are.
The last thing you'd want as a landlord is for a property to become suddenly vacant when a renter realized the space won't actually work for what they need.
Going through these and other questions will help both parties come to a clear understanding of what the agreement is going to be. It helps eliminate any surprises on either end and helps everyone feel confident that it will be a good fit for everyone involved.
4. Personality Match
Along a similar line, before you commit to having someone live in your rental space it's helpful to get to know their personality a bit. You'll likely be interacting with them on various occasions, so you want to know you can get along.
A landlord and tenant relationship is a very interesting one with a lot of opportunities for conflict or tension. Having a base understanding of each other helps you to work through those sometimes tricky situations much easier and quicker than if you didn't mesh at all.
But it's important to remember that you can't keep someone from living in your space based on certain factors like race, religion, or gender. Every landlord should have a good base knowledge of the Fair Housing Act to keep themselves safe.
5. Special Accommodations
When you're getting to know the basics of your potential tenants, you should give them the opportunity to discuss any special accommodations they may need.
This would include anything that is outside of your regular agreement, like kids, pets, or service animals. But it could also include a different rent due date based on their payment schedule. It's helpful to go over anything that might be a cause for concern before signing any agreements.
As you help your potential renter understand what you are looking for and what you expect, they can as questions or bring up any concerns. This also allows you to terminate your agreement easier if an issue does come up because you know that everything was already covered and they agreed to it as well.
6. Professional References
One of the best ways to really screen your potential renters is to ask for references. These will be written by people who really know them and will allow you to get a better sense of who they are and how responsible they are.
It's best to have set parameters for who the references can come from and who wouldn't work. A former landlord would have great insight into how you are as a tenant. But your Mom would most likely only write positive things to help you get the place you're looking for. Encourage professional references for the most accurate representation.
Some landlords also give a list of questions a reference could answer as a way to find out the exact information they're interested in.
Best Practices for Screening Renters
Screening renters doesn't sound like a very fun process to go through but it's absolutely critical to being a successful landlord. When you know your renters and feel confident in their ability to follow the agreements made, your life will be much less stressful.
But if this task doesn't sound like something you want to undertake but would still like the benefits of a vetted renter, it's time to hire a property management team. These professionals will take on the task of finding qualified renters to fill your space with your set parameters and requirements.
If you'd like more information on hiring a property management team and what we could offer your business, contact us today!