Choosing the right tenant to live in your rental property is key to how successful the overall investment will be. The right tenant will, among other things, care for your investment property, make timely rent payments and communicate with you readily regarding maintenance.
But how exactly do you find the right tenant for your rental property? Well, you start by screening your prospects thoroughly before allowing them to move into your rental property.
To help you with this, we at Mark Thomas has put together the following is a quick guide to an effective tenant screening process in Durham:
Select Your Criteria
In other words, set your expectations so you know exactly what your goal is when screening a prospective tenant. The following are some of the qualities you’ll want your ideal tenant to have:
- A sufficient monthly income to cover rental expenses without issues.
- A good credit rating as a measure of their financial responsibility.
- No relevant criminal background.
- No prior evictions.
- A good rental background from prior landlords.
- A good employment background.
You may also wish to consider the demographic you are looking to attract. For example, if your property is in a place with many students or accepts pets, you may want to cater your screening and marketing towards them.
Begin the Screening Process Early
It’s not the best idea to start the screening process after directly a prospect submits their rental application form as this can just waste your time. Instead, start the screening process when you establish a contact with the prospect.
So, begin screening during the first phone call, text, or email you get from a tenant looking to make an inquiry about your property. You can use that opportunity to ask the tenant important questions such as:
- Why are you moving out?
- Does your landlord know that you are looking to move out?
- When do you want to move in?
- Are you ready to pay the move-in costs?
- How much do you make per month?
- Where do you work?
- Have you ever been convicted of a crime? If so, for what reason?
Asking such questions can help you catch red flags early on in the process, saving you valuable time.
Use an Application Form
In the rental application form, you’ll want prospects to provide crucial information about themselves including the following information:
- Their contact information.
- Where they currently live.
- Their former landlords’ names and their contact info.
- Contact information of their current and prior employers.
- Authorization to run their credit and background.
- Their monthly income.
With this information provided by a prospect, you can figure out if they would be a good long term renter, then move on to the next step of the screening process.
Verify the Prospects Information
You’ll want to find out whether the tenant is employed, and whether or not they can afford to rent your property.
It’s best to only consider tenants that have a stable employment history and generally, only rent to tenants who has a monthly income is 3X the monthly rent. So, if the monthly rent is $1,200, you should only consider prospects who collectively make at least $3,600 a month.
But how will you be able to verify this information?
By contacting the prospective tenant’s employer. Some of the questions you’ll want to ask their employer includes:
- Is the person in question an employee at your company?
- How much money do they make per month?
- When did they start working at the company?
- What are the terms of employment?
- Does the tenant come to work on time?
- What position do they hold in the company?
Abide by the Fair Housing Act.
The North Carolina Fair Housing Act requires that landlords treat their tenants fairly, regardless of their: race, color, gender, religion, nationality, familial status, and disability. So, part of being ready to rent your property is ensuring you comply with these laws.
Verify the Prospects Rental History
The only way to do this is by contacting the tenant’s prior landlords. Contacting prior landlords will help you find out a few important things about the prospect. Including:
- Whether or not the tenant paid rent on time.
- Whether or not they were a nuisance to other tenants.
- If the tenant abided by the terms of the lease agreement.
- If the tenant caused any negligent property damage to their rented premises.
Check the Applicant’s Background
There are a few of companies that can help you check someone’s background. Popular options include Star Point Tenant Screening, and ScreeningWorks Pro.
By running the background check, you’ll be able to get crucial insights about a tenant in regards to their:
- Eviction history: Here you can confirm if the prospect has ever been evicted.
- Criminal history: Should there be any convictions in the applicants past a check would highlight them.
- Public Records: Public records will also have information regarding the prospect’s legal history. Here. your focus should be on lawsuits regarding nonpayment of rent, or excessive property damage.
Bottom Line
Knowing how to screen tenants is an important skill a successful landlord should master. You’ll not only be able to protect your Durham investment, but your career as a landlord will be considerably more fruitful.
If you have any questions regarding tenant screening or any other aspect of property management. Please don’t hesitate to contact ourselves at Mark Thomas Properties.
