As landlords and property managers we are faced with a whole host of issues to deal with some of them cannot be eliminated because the life expectancy and normal wear and tear of items in a house are finite and therefore repair and replacement of items is necessary. One thing that landlords and property managers do have control over is the people that are allowed to rent their properties. Bad tenants can cause more problems and headaches then any worn out appliance could ever cause. The way to eliminate problem tenants is through the use of a good tenant screening process. It’s not only important to have a process so that you don’t miss an important step it is also important that you are consistently following the same criteria and treating all prospective tenants the same. A violation of the fair housing act can spell legal trouble which is never good news. In addition, if you are making exceptions for people who don’t pass your screening criteria they will likely fall short of your expectations of paying on time and taking good care of the property.
The screening process should start at the first point of contact, this generally occurs via an email or phone call from the prospect with an expressed interest in your rental property. This is a good time to ask some questions, at this point you haven’t wasted time showing the property and the prospect hasn’t paid the application fee. Nothing gained and nothing lost at this point and it’s a great way to determine if the prospect is going to be a good tenant. If you are contacted by phone make sure to jot down notes on the prospects answers to your questions.
1. Why Are You Seeking A New Place To Reside?
While this question is a bit awkward because it seemingly shouldn’t matter it may reveal some information that could matter A LOT! For instance if the tenant is moving because of an eviction, big red flag! Or even if the tenant received a no cause vacancy notice this could indicate that the landlord was not happy with the tenant. If the prospect is moving because of issues with their current landlord you should pay attention these issues could carry forward into your tenant/landlord relationship.
If the prospect is moving to the areas because they landed a good job this is a good sign. They are employed and employed at a place that is worth moving for. I do say good job because if it’s a great job they likely will be looking to purchase a home at some point and that could mean short term tenancy. Another very real and legitimate reason to move is because they need more space for a new addition to the family. There are a whole host of reasons that people move that are perfectly fine but it does pay to ask this question and listen carefully to the response.
2. What Is the Household Monthly Income?
This question is very important and you would not believe how many times I‘ve gotten inquiries from people who simply cannot afford to rent the property. In general, monthly income needs to be at least 2.5 times the rent payment. The rental application and credit report will sort this out in more details but having a minimum monthly income allowed will weed out a lot of unqualified prospects. Obviously if the prospective tenant has a large debt load the income to debt ratio needs to be sufficient to cover the monthly rent payment. Letting the tenant know that the first and last months rent plus security deposit is due at lease signing is also a way to weed out those who would struggle to come up with the monthly rent payment. Those who live paycheck to paycheck don’t have a buffer to cover unexpected costs and rent payments often times are of a lesser priority then cell phone, car payments, etc.
3. Do You Consent To A Credit and Criminal Background Check?
This simple yes or no question is the question that I’ve really learned a lot about a persons past. Obviously if the prospect says “no, I won’t consent” then they should be automatically disqualified. I‘ve gotten a lot of stories and excuses as to why their records are in the state they are and sometimes there is seemingly legitimate reasons but I absolutely will not waiver from my tenant screening criteria. I’ve found in the past that making exceptions is bad business and can be a costly decision. Plus, as I mentioned earlier treating all prospects and tenants equally is the law to prevent discrimination.
4. Will You Provide Contact Information For Your Current And Previous Landlord And Employer?
If a prospective tenant refuses to provide references it is a clear sign that you would unearth something that reflects poorly on the individuals wanting to occupy your rental home. The reason I include previous landlord as well as current is because if the current landlord is trying to get rid of the troublesome tenant they may be inclined to provide a positive reference in order to get the bad tenant to move along. Getting information on a prospects habits and character will give you a good idea if they will be good tenants. Asking obvious but nonetheless important questions such as; Why did they move out? Did they pay rent on time? Did they leave the property in good condition?, Were there any conflicts with the neighbors?, Were there any issues with illegal activities?
5. How Many People and Pets Will Be Residing With You At The Home?
The more people living at your property the more wear and tear you can expect. Some things to ameliorate this could be to set a limit on the number of people you allow or require more for the security deposit. It’s also a good time to inform the prospect that everyone over the age of 18 is required to pay the application fee and consent to a credit and criminal background check. Obviously if you have a no pet policy or restrictions on the type or size of pets and the prospect doesn’t meet that criteria then there is no need to waste either of your time showing the property.
Asking these five questions only takes a few minutes and should give you enough information to know if you want to proceed with a more formal and time consuming screening process.