36% of all the 122.8 million households in the US are renters. These are people who are paying to live in someone else's property.
They have signed leases and agreed to make their rent payments on time. Or at least, that's the hope for the owners and property managers handling these properties.
What can you do to ensure the people you rent to are going to be good tenants? It's too easy to make errors with screening tenants, especially if you don't have a screening process.
Read on for the biggest mistakes landlords and owners make when filling a rental vacancy.
1. Rental Application
As you begin the tenant screening process, one of the first things you must do is to have a prospective tenant complete a rental application.
In today's competitive housing market, often, there are many applicants for the same property. Save yourself some unnecessary screening processes by starting with a rental application.
This application can include questions like:
- Basic contact information
- Do you have rental references?
- Do you have a verifiable income?
- Are you okay with credit and background checks?
You also want to know when the tenant wants to move into a property. You don't want to hold a property empty if it's too far out for your current vacancies.
If this all seems like too much, you might consider hiring tenant screening services or having your property managed by a property manager.
2. Asking for Proof of Income
One key element to a quality tenant is one who can pay their rent on time and has the funds to make rent each month.
A vital screening step to not miss is asking for proof of income. This might include:
- Bank account statement
- Letter from current employer
You need to know if your potential tenant can afford the unit. The general rule is that about 30% of their income should go towards rent.
3. Checking References
Another mistake to avoid is not checking references that are provided to you. It doesn't do much good to ask for a reference and then not go through the motions to contact the reference.
You want to ask for both employment references and references from previous landlords.
Employment references indicate that the tenant is gainfully employed at their disclosed wage. Landlord references tell you what kind of tenant they were previously. Did they abide by the lease and pay the rent on time?
4. Tenant Interview
Many landlords opt not to interview prospective tenants. You should have some basic interview questions for tenants who want to live in your property.
People will lie on paper. It is harder to lie when looking at a person face to face.
By asking some basic questions, you'll quickly get a sense of the type of tenant you can expect them to be. If you can tell right away there are issues, there's no use wasting your time doing more checking on the tenant.
5. Credit or Background Checks
You must do both credit checks and criminal background checks on all prospective clients.
Bad credit tells you there's a pattern of not paying their bills. While having a blanket policy about not renting to someone with a criminal record can be discriminatory, you want to look closely at the record.
It's your responsibility to keep the property safe for others and rent to a tenant likely to stay for a while.
Avoid These Errors With Screening Tenants
Avoid making errors with screening tenants by not going through all the steps to ensure you have the best candidate moving into your property.
If you're an owner looking for help managing your properties, including the tenant screening process, we can help. Contact us today to learn more about how we can assist you with your rental properties.