Finding the best tenants is not always easy. With 122 million households renting in the United States, it's hard to separate the good from the bad.
Fortunately, we can make that easier. Let's talk about why tenant screening is so important and how to screen tenants for the best results!
Why Is Tenant Screening Important?
Before we discuss using tenant screening services, let's talk about why they're so important. Here are a few key reasons!
Securing Your Investment
Like the neighborhood and the building itself, your tenants are another variable that can cost you a lot of money. Again, like these other factors, your only means of security is preemptive.
Essentially, once the tenants are in, there's not a lot you can do. Evictions can take a long time to process.
For this reason, it's critical to choose the right tenants, and you can't read minds. However, tenants with poor rental histories, low income, bad credit, and criminal backgrounds are the most likely to cause issues. Screening is your only defense.
Tenant Safety and Comfort
Your tenants will feel much safer and more secure if they know that the other people in their building have undergone background checks. This can help you find and retain the right tenants in your properties.
Peace of Mind
Knowing that your tenant has a stable, long-term income is essential. Also, understanding their long-term financial situation, criminal background, and more will help you rest assured that your property is safe!
What Does Tenant Screening Involve?
Tenant screening can look different for different landlords. However, there are a few factors we highly recommend screening for.
First, and most importantly, rental history. Always ask for references from current and previous landlords. Keep in mind that their current landlord may have a reason to lie to get rid of them, so asking for previous landlords can help you discover the truth.
Second, income verification is incredibly important. You need to know that your tenants can cover their rent, which means they need at least three times the rent in take-home pay each month. Always ask for pay stubs.
If they don't have paystubs (self-employed, etc.), ask for proof of payment and deposits into their account. There are a few other income verification options to try if necessary.
Third, we strongly recommend credit checks. A high or low score isn't a guaranteed answer, but it will give you a good idea of how they handle their debts. Evictions can also appear on these checks, so it's worth looking for!
Finally, we recommend conducting a background check. This will just help ensure that your tenants won't be dealing drugs out of your building, putting other tenants at risk, or causing any serious issues.
Screen Your Tenants Today
Now that you know the importance of tenant screening, you see that it's an involved process. Fortunately, you don't have to do it yourself. With the help of a trusted property manager, you can have your tenants screened for you whenever a vacancy arrives!
Stay up to date with our latest real estate tips, and don't hesitate to contact us with any questions!
Need More Info?
Should I Rent or Sell