Today, we are talking about tenant screening and the procedures you’ll want to follow when you’re placing tenants in your property.
The very first thing you’ll want to do when screening tenants is to create rental criteria, which you need to apply to every applicant who wants to live in your property. You’ll want to put that in writing as well. Hand the criteria out to any person who sees the property and wants to fill out an application. It’s actually a good idea to hand out applications to anyone who sees your property so you can demonstrate you’re being fair. Then, have an objective system for scoring those applications. Make sure you’re consistent so you’re compliant with fair housing laws. If you ever end up in court, you’ll be able to defend yourself based on data.
Make sure the tenant has enough money coming in each month to pay the rent. You also want to look at employment and make sure they have been employed for a specific amount of time, or at least in the same field.
It’s up to you to decide who you will let in and who you won’t. Just be sure you don’t make any exceptions. You have to stay consistent and keep the same standards for everyone. If you make exceptions, you get into trouble.
You want to look at the credit report and also at their credit score. Dig into the report to see if the tenants are showing any negative credit patterns. The score won’t tell you that. Someone with marginal credit might also be digging their way out of a hole. Some of our best tenants have been people who lost their homes during the housing crisis.
Make sure you get good landlord references, and not just from the current landlord. That landlord might tell a bit of a fib to get rid of a bad tenant. If you go back two or three landlords, you can be sure you’re getting credible information. When you’re talking to the landlords, make sure you’re not talking to a false reference. You can check this by throwing out an incorrect address when you’re talking. See if they correct you. Cross reference the name given on the application with the tax records on the property address and see if everything matches up. This can help you ensure you have a legitimate landlord reference.
There’s a lot more we can discuss about tenant screening. If you have any questions, please contact us at Madison Real Estate and Property Management.