In order to make money as a landlord, you need properties that are correctly maintained and tenants that will stay long enough – and pay their rent on time – that you will make money.
Screening your clients is an integral part of owning income properties, and it is more easily accomplished by hiring a property management company and letting them handle the hassles of being a landlord. Weeding out the bad renters will be easier for a company with years of experience in that area.
The purpose of screening tenants is to evaluate how risky potential tenants may be. In this way, the most qualified applicants can be found for your property. You need trustworthy tenants who pay rent on time and keep their homes in acceptable condition.
Some landlords would choose a complicated process to screen tenants. An experienced property manager can tell you the best ways to screen tenants, based on their knowledge of screening. It doesn’t need to be stressful.
The process of screening tenants can take days or even weeks, if you’re not familiar with it. You may be overwhelmed as a landlord, when you could relax and enjoy your rental income if you spend a small portion of that income on hiring a property management company. They can evaluate potential applicants effectively, in the shortest time period.
What Is Important to You?
There is no reason that tenant screening has to be a difficult process. A property management company knows how to identify the requirements of your tenants, and still treat all applicants with respect.
The first concern is the potential tenant’s ability and willingness to pay the rent you are asking, for renting your unit. Your property manager can determine whether the source of the income is stable and long-standing. If a prospective tenant has income that is not steady, your property agent may ask for a co-signor to cover the rent if the main applicant is not able to pay.
Protecting Your Rental Income
An experienced property manager will know where to set a security deposit, so that your rental income will be protected. The prospective tenant’s ability to pay rent is the most important priority. If you are a landlord who does not yet own many properties, it’s all the more important for you to have a cushion to cover occasional vacancies.
The Process of Effective Screening
Your experienced property manager has a refined screening process that allows him or her to evaluate a potential tenant effectively with minimal downtime for you. As in many fields, time is indeed money. There can be a thorough evaluation, a showing and a lease signing in a relatively short time period.
Phone or Email Interviews
Your property manager will make sure that the unit you have available can truly meet the needs of a prospective tenant. A phone call may save the manager a trip out to the property. If no red flags are apparent to the manager, then he can set up a time to take the potential client to view your property.
Verifying Identification and Accepting Applications
Online applications can be used by your property management company to screen tenants most effectively. Paper applications have been the norm in the past, but online apps are a lot easier to store and access. Your property manager will check the photo IDs of potential tenants. The person who is applying for the lease must be the one who will be renting a unit.
Obtain Proof of Employment or Income
Paystubs adequately verify a potential tenant’s employment and income. Your property manager will ask for recent paystubs, to ensure that the prospective tenant makes what he says he does.
Review Credit Reports and Scores
Your manager will review recent credit reports for potential renters. If there are any flags, he will know how to inquire about them. Instead of keeping paper credit reports secure, your manager may use online apps to review credit reports and to process the payment of rent.
Check with Previous Landlords
An experienced property manager will call an applicant’s last one or two landlords, to determine the start and end dates of their last leases. He will check into partial or late payments. Late paying renters are not an effective way to utilize your rental properties.
Your manager may also look into disturbances or noise violations. Were your potential tenants considerate of their neighbors? What was the condition of the property when they left? If they trashed their last unit, they may trash yours, too.
An experienced property management company will use other methods as well, to ensure that you get the best tenants. Then a business decision will be made, in an objective and professional manner, so that your property will attract and retain good tenants.