Do you want to find qualified tenants for your rentals? Developing a tenant screening process is the best course of action!
Being a landlord can be challenging but certainly comes with its rewards. You’ll just need to hone a set of skills to be successful. And among those skills is learning how to rent to the right tenant.
You want a tenant that pays rent consistently, cares for your Doylestown rental property, and notifies you of issues on time, among other things. Finding a great tenant, however, isn’t always a walk in the park.
That said, finding a great tenant on your own is achievable with the right planning. The following are some tips to help you along:
Know the Your Target Demographic
You want to rent to the most qualified tenant you can find. Qualified tenants possess the following attributes:
Pay Rent on Time
Cash flow is key when it comes to a rental investment. Consistent cash flow will ensure you pay your bills on time and optimize your ROI.
Has Stable Employment/ Income
The last thing you want is to rent to someone with an unsteady employment record or income source. This uncertainty can lead to inconsistent rent payments somewhere down the road.
Has a Solid Rental History
Find out from prior landlords what to expect from the tenant. Ask if the tenant paid rent on time, cared for their rental property, had issues with their neighbors, and if they would rent to the tenant again.
Has No History of Evictions
Past behaviors often predict future behaviors. That said, if the eviction history is the only thing that tarnishes their application, find out more.
Once you have identified the kind of tenant you want, draft a meticulous screening process.
Pre-screen Prospective Tenants
Pre-screening prospective tenants will help you identify red flags early in the process, saving you valuable time. The pre-screening process includes the following:
Creating a Rental Listing that Highlights Your Requirements
You should create one that has a catchy headline, an engaging and detailed summary section, and quality photos. Aside from that, you should make sure that you highlight important information like whether or not you accept pets or allow subletting.
Ask Vital Pre-screening Questions
Don’t wait for prospective tenants to fill out an application form to start screening them. Instead, get started the moment the tenant contacts you after the marketing process is over.
- Ask them important questions such as:
- Why are you moving?
- Have you ever been evicted before?
- Are you ready to pay all the move-in costs?
- Will you give consent to have a credit and criminal background check performed?
Meeting the Tenant in Person During the Showing
As you show prospective tenants around, continue learning more about them. This will help you catch red flags early. After the pre-screening process is over, start the actual screening process. Note that during every step of the marketing and screening process, you must abide by the terms of the Fair Housing Act.
Verify How Much the Tenant Makes
Don’t just take the tenant’s word for it; verify the information they have given you. You want to rent out your property to a tenant that is able to afford rent consistently.
For employed applicants, you can verify their income by asking for dated stubs, a W2 tax form, or even calling their employer. For self-employed individuals, you can verify their income by checking their bank statements. As a general rule of thumb, go for tenants that make at least 3X the rental price. For example, if you’re charging $1,200 for rent per month, then only consider tenants making at least $3,600 a month.
Call Prior Landlords
Get in touch with prior landlords to find out what their experience was like renting to your prospective tenant. The reason why you call prior landlords as opposed to the current landlord is simple, prior landlords have no reason to lie. On the contrary, the current landlord may see it as an opportunity to get rid of a problematic tenant.
The following are some questions to ask prior landlords:
- Did this tenant rent from you?
- Did they pay rent on time?
- Did they take care of their rented premises?
- Did the tenant notify you that they were leaving?
- Would you rent to the tenant again? If not, why?
Analyze the Prospective Tenant’s Credit Report
Once you’re through with calling the prior landlords, run their credit background. At the very least, the credit report should be able to provide you with crucial information such as:
- Credit score
- Complete account history
- Prior evictions
- Social security number verification
Ideally, only consider tenants with a credit score of at least 680. This is a good metric that shows a tenant is financially responsible and has a high likelihood of paying rent on time and caring for their rented premises.
Abide by the Fair Housing Act
The Fair Housing Act requires that landlords treat all tenants equally and fairly based on certain protected classes. The protected classes include sex, race, color, nationality, religion, disability, and familial status.
Examples of questions that would be in violation of the Fair Housing Act include the following:
- Which church do you go to?
- Are you married?
- Are you Black?
- Are you half-Asian?
There you have it – a quick guide to effective tenant screening in Doylestown. For expert help in selecting tenants, turn to the team at Keyrenter BuxMont. We are a qualified property management company in Doylestown and serve the surrounding areas.
We can help take the stress out of managing your investment property. Get in touch with us today to learn more about our property management services!