Today, we want to share some helpful hints on how to proceed with a tenant screening. Please remember that I’m not an attorney. However, after successfully screening many tenant applications at The Equity Group, I know what to look for when you’re trying to place a good tenant in your property.
These are the five basic screening tips we can offer based on our experience and procedures.
Check Credit Scores
Set a minimum FICO score that applicants must meet before they’re approved for your property. You can determine what that minimum should be. Maybe it’s 550 or 600, or maybe you’ll want to set it even lower to give applicants with all credit backgrounds an opportunity to rent your property. As long as you have a minimum score that must be met, you will stay out of trouble with potentially bad tenants or claims of discrimination.
Measure Income Against Rent
It’s also a good idea to set some income standards. The industry standard is typically to require that tenants earn at least two or three times the amount of your monthly rent. It’s a good starting point, and it ensures that your tenants are bringing in enough money to ensure they pay you on time every month. Income and credit standards are important and basic ways to determine if a candidate is qualified to rent your home.
Search for Past Evictions
The credit score is important, but even more important is eviction history. You’ll want to do a nationwide eviction history check. For us, any eviction is a non-starter. We will never rent to a prospective tenant who has an eviction on their record. Even if the tenant has a great story that explains why they were evicted, we will not approve the application. We simply will not rent to people who have been previously evicted.
When you’re reviewing a tenant’s credit report, take a look at what the overdue bills and missed payments reflect. If you see outstanding water bills, utility bills, phone or cable bills, it could mean trouble. We typically require tenants to pay those off before we approve their application, or we’ll deny them completely. If someone cannot or will not pay a cable bill, there’s a good chance that a landlord somewhere hasn’t been paid, either. Typically, tenants will pay smaller bills like the electric bill or cable bill before they make the larger rental payment. Be wary of any debts like this that you find on the credit report.
Show the Property in Person
It might seem strange, but we always recommend you meet your prospective tenants in person and make sure they see the property. Lots of times, people will look at the pictures in a listing and get excited about the home. They’ll apply and set the move-in date, but then when they see the home, they realize that it’s not what they want. This wastes time and money. Meet with the person who is interested in your home, and be sure they see the rental before you allow them to apply.
These are just a few of our recommendations for a good tenant screening process. Contact us at The Equity Group if you have any questions about finding a great tenant or anything about property management in Visalia.