The wrong tenants can destroy your property and leave you holding the bag when it comes to paying for repairs. It isn't easy to tell when a potential tenant is as reliable as they seem. That's why tenant screening is so important.
Read on to learn more about tenant screening and how it benefits your rental properties.
What Does Tenant Screening Entail?
Tenants aren't always truthful when it comes to their rental history. That's why it's important to check on a few things before you have them sign anything. Your tenant screening process should include:
- Ask for three references
- Eviction check
- Criminal history check
- A credit check
It might seem like a lot, but it's definitely worth the effort. If any of these four checks turn up a red flag, you might want to reconsider renting to those tenants.
The Benefits of Tenant Screening
There are a ton of reasons why screening your tenants is a good thing to do. Here are four of the top benefits.
Protect Your Property From Criminals
Some applicants may have a criminal history when they apply with you. While this isn't necessarily a bad thing, it's important to know what that history entails. A lot of people may have inconsequential convictions in their history, but some may not.
Performing a background check helps inform you on what, if any, crimes an applicant may have committed in the past.
Learn Their Payment History
Another huge benefit to screening tenants is learning their rent payment history. Previous landlord and employment references are a must in this scenario. Reference checks provide a way to ensure your prospective tenants have a history of paying rent on time.
Help Prevent Evictions
An eviction is a long, arduous process that nobody likes going through. Removing a tenant from your property can be lengthy, expensive, and emotionally draining. When you know your tenants' previous eviction history, you can get a better idea about what you may have to deal with later on.
Frequent evictions are never good. An eviction several years in the past usually isn't as big of an issue.
Learn Their Financial Situation
Most landlords agree that seeing their prospective tenants' full credit report is helpful. The report can let you know about any financial issues the tenant might be dealing with. If their credit score is low, you can see why.
You'll also get to see the debt-to-income ratio of the applicant. Student loans, medical debt, credit card debt, and more will show up on their credit report. Some landlords don't care about medical or student loan debt, but some do.
It's up to you to decide what debt-to-income ratio you're willing to work with.
Get Help Finding Tenants
Tenant screening is an integral part of being a landlord. It helps you learn more about any applicants you have. By viewing their credit score, criminal history, past rental history, and more, you get a better idea about who they are and what working with them is like.
Of course, if this sounds like too much work, that's okay too. When you work with a property management company to oversee your rental properties, they'll help you with finding tenants, screening them, collecting rent, and much more.
If you'd like to learn more about how a property management company can help you find tenants, contact us today.
