“Tips For Choosing The Right Tenant” written by Mike Marko
I know for a fact that every property manager wishes to get the right tenant, or the most qualified tenant for their rental properties, at the end of a screening process.
Often times our rental properties have bad tenants who don’t pay rent on time, cause trouble in the community, or continually damage the property they are renting.
Why does this happen, sometimes more often than not? Even if your rental property business has never had a bad tenant, watch out because that bad tenant could be right around the corner in the application you are approving right now!
At some point, just because we are always renting units to people we barely know, property managers commit mistakes when choosing tenants for their rental property business. Many times their mistakes are due to the lack of enough knowledge on running a rental property business, and other times because they don’t have an excellent screening process for choosing the right tenant.
As a property manager, you should be familiar with and knowledgeable about how to conduct a proper tenant screening. That’s why in this article I’ll be providing you with some tips that will be useful for you when conducting tenant screening.
What are the things to consider when accepting tenants for a rental property business? Is it acceptable to just accept applying tenants because they look like they are good and responsible people?
Are their appearance enough to determine that they will be a good fit for your property?
How will you decide whether a tenant is a good fit for your business?
For property managers, choosing a bad tenant for your property can be a costly expense and you will become a liability to your business. Leasing your property to the wrong person could result in damages to the property, unpaid rental payments, and even legal actions to sue the tenant for eviction processes and other issues.
By taking the time to search for the right tenants through a proper tenant screening, property managers can minimize these risks and avoid any additional costs.
From face-to-face interviews to checking a prospective renter’s credit history, the tenant screening process is important to be done step-by-step and standardized so you can achieve your desired result. No step should not be neglected since each step will bring you significant information that will reveal every detail behind an applicant’s past rental history, credit history, and criminal background history. This information will greatly help you determine whether an applicant is deserving of a slot in your rental property business.
Look at these five simple tips for selecting the right tenant for your property.
1. Meet The Applicant
Conducting a meet-up is an important step for the tenant screening process. This will help you build a connection with your tenant and will start a relationship between a property manager and a tenant.
Prepare your questions right before the day of the meet-up. Make sure that your questionnaire will cover every little detail that would be significant in your tenant screening process. A well-prepared questionnaire will be useful so you wouldn’t forget what you need to ask when you face the applicant.
Once you have the questionnaire, this is your chance to reveal all the information you need from the applicant.
Some easy and common questions to ask would be:
-How many people will live in the property?
-What is the applicant’s job?
-How long have you been looking to rent?
-What was the length of time of your last rental?
-Are you looking for a 1-year lease or a month to month rental?
Asking questions allows you to understand why the person is looking to rent your property. Also, you ask questions to get an idea about the person’s capability to pay the bills, and etc. These questions will guide you whether the applicant is a good fit for your property or someone you want to deny renting your property to.
You want to get to know if the tenant gave you the right information during the rental application. So take the time to ask for additional information based on what was supplied by the application.
Put your Sherlock Holmes hat on… Be the detective. Determine if an applicant has been honest in answering the questions. You will determine the applicant’s honesty if all the information from the reports are consistent with the answers that the applicant gave you during the meetup.
It would be easier to trust a potential tenant if you know that they are honest with you before you let them rent your property.
Be straightforward in delivering your questions. Using succinct questions will indicate to the tenant that you’re not playing games during the tenant screening process.
2. Thoroughly Investigate
As a property manager, you need to take on the role of the head investigator of your prospective renters’ applications. Checking out, reviewing and verifying the information on the applications is the best way to sort and determine the most qualified renters for your properties.
As you gather information during the initial part of the application, you may consider getting in touch with the people who know the applying tenant very well. Try contacting their previous property managers, employers, and relatives to ask questions that are important to complete your background check of the tenant.
Be sure not to rely solely on the contact numbers of employers that are provided in the rental application form. Better search for the contact numbers on the Internet before you proceed in making the call to avoid receiving any fraudulent information from the prospective tenant.
Contacting the people listed by the tenant on the application is the best way to determine the tenant’s personality, behaviors, and other personal habits they may be inclined to. When asking questions It is better to hear what these people can say about your applicant. It is also an opportunity for you to triple check whether the information in the applicant’s rental application and the information you received from your meetup with the applicant is correct.
From all the documents and reports that you gathered, make sure to carefully analyze every single detail so you can come up with a right decision in selecting tenants. This will help to avoid any problems in the future. Take all the reports seriously and document all the negative information you uncover.
3. Check The Credit History
One of the important things you want to take a look at when doing a tenant screening is their credit history. If the tenant possesses a good credit report then that is good news. That means that the tenant is most likely good and is capable of paying dental bills too.
However, if after the credit check you found out that the tenant is the opposite and has a bad credit score, that is an immediate red flag in your decision to rent to them. It is for you to decide whether you will still accept the tenant’s application. There are a lot of things you have to consider in this step so be strict and have your standard criteria.
There is nothing wrong if you decided to reject a tenant’s application because of a bad credit history. It is just normal that you will have to select those who are capable of paying monthly rental fees. You are running a business and not a charity organization so you should be practical. Just inform the applicant your reason and present the supporting credit report that you obtained so the applicant can also correct any wrong information in the report.
4. Look For A Warning Sign
During the process of tenant screening, you have to be observant with the answers that you will get from your interviews with the tenant and the other references. If you’ll get a bad information or any bad record that the tenant did in the past, then you have to decide if you will still let the tenant with a bad record to rent your property.
There are instances where tenants could still be accepted even if their reports contain negative information. For example, the negative report has something to do with late rental payments that have happened a long time ago and you found out that there are no late rental payments that occurred after that, this shows that the applying tenant became more financially stable. In this case, you would want to ask the tenant why there was late rent and weigh their answer in your decision to rent the property to them…
There will be also a time that the records will not match to the tenant’s answer from the interview or even if you contact the tenant in confirming the information from the data you’ll get. This is probably the biggest red flag you can find when doing tenant screening. When you have to give it a second thought if the tenant is telling the truth that is an undesirable way to start a rental relationship because you may find that they will continue to mislead during the process just to make it through your screening process.
5. Listen To Your Instinct
When you are reviewing and interviewing possible tenants you will develop a feeling as to if you can work with that person in a rental agreement or not. It is important to listen to your instincts or intuition as a rental agreement can last years. When you feel good about the result, then this is the time where you will accept or reject the tenant’s application. If you don’t have any doubts or worries, then you can let the tenant rent your property.
All the information and documentation the renter has provided checks out, and you are almost ready to get him as a tenant. However, there is something holding you back from offering him the contract.
Even though everything seems to be in order, you feel uncomfortable renting your property to this particular individual. Always listen to this gut feeling and trust your instincts before making a final decision.
I know for sure that every property manager wants to have a good tenant only and avoid those who are undesirable tenants. If you will carefully carry out the steps in conducting a proper tenant screening, you will learn and master how to select good tenants for sure.
Using the tips in this article are tried and tested and will definitely help you get the best renter for your property.
I hope this article helps those who are having a hard time choosing the right tenant.
If you need help marketing your business online then check out IM Consultant Services.
Disclaimer: This commentary is a matter of opinion provided for general information purposes only and is not intended to be taken as investment or trading advice under any circumstances. Information and analysis above are derived from sources and utilizing methods believed to be reliable, but we cannot accept responsibility for any losses any person may incur as a result of this analysis. Individuals should consult with their personal financial advisers. By using this web site or any information contained in it, the user specifically and expressly agrees that no advisor-client relationship is created between said user and any author, owner, executive, or principal of this web site by either use of this web site, or by any information, product, or service offered by or on this web site. No express or implied guarantees or warranties as to investment or trading results are made, and any perceived insinuations of such are hereby expressly disclaimed.