Every landlord dreams of finding tenants who not only pay rent on time but also stay respectful and take care of the property during their tenancy. Renting to quality long-term tenants also means minimizing tenant turnover. If a rental property remains vacant for too long, the expenses associated with listing and advertising the vacancy create extra stress for landlords and property owners.
Following are some tips for how to find good tenants and avoid turnover. First off, thoroughly screen all applicants before making a final decision. When it comes to choosing that one perfect candidate, proper tenant credit and background checks are essential for getting the necessary details about potential tenants, such as employment history, previous residences and landlord references, income sources, etc. No matter how badly you need to fill the vacancy, a proper tenant background check should always be performed.
Form your tenant screening policy
Having high standards is always important in business, especially as it relates to maintaining tenant-landlord relationships. From this perspective, establishing screening criteria allows you to set clear standards and prevent evictions in the long run.
Take a look at some example guidelines to help you create your own screening policies:
- Credit history
A credit score of 650 or higher is considered good for a prospect applying for a rental.
If a potential tenant’s score is lower than your standard score, but besides that, the applicant meets your requirements and has positive feedback from previous landlords, you can still consider proceeding with the application process.
- Employment history
Verified employment for the last few years. Keep in mind that self-employed applicants can use tax statements as a type of verification.
- Rental history
Ideally, you hope to find no past evictions. If you find evidence of an eviction case, investigate the exact reason and other circumstances surrounding the eviction prior to denying the application.
- Income requirement
An applicant’s salary should be greater or at least equal to 3 times the monthly rent. However, a prospective renter might have other eligible income streams such as checking account balances and other financial statements, so make sure to consider all potential income sources.
- Criminal history
No criminal records.
Keep in mind that some states prohibit landlords from rejecting rental applications based exclusively on criminal convictions.
You can make your guidelines more detailed and include other exceptions, if needed. However, always make sure your policies comply with the federal Fair Housing Act and other state and local laws.
What makes a perfect tenant
- They have a good credit score.
As mentioned above, applicants with a good credit score are more likely to provide full rent payments throughout the tenancy as well as upfront security deposits. A good score indicates a tenant is financially responsible and won’t put you at risk later.
- They take care of the property.
Simply put, great tenants take care of the rental property as if it were their own. A good tenant will always notify you of any maintenance issues and will assist when it comes to dealing with contractors.
- They pay rent on time.
Prompt rental payments are probably one of the most preferable characteristics of a good tenant. Timely rent payments mean that you will be able to cover mortgage payments and other property-related expenses with no hassle.
- They follow the rules.
Great tenants take lease agreements seriously and follow housing laws and regulations. Your task as a landlord is to clearly define your policies in the rental agreement and have it signed by the tenant.
Red flags you should never ignore
Along with understanding positive qualities in applicants and tenants, identifying bad tenants is equally important. The eviction process is complicated and cumbersome so it’s better to prevent it by finding quality residents rather than quickly filling a vacant property without an accurate screening.
You can learn more here.
Online tenant screening: background and credit checks
Let’s now examine tenant screening procedures. Some property management services such as TenantCloud offer tenant screening within their system so you don’t need to use additional services for background and credit checks.
Due to a partnership with TransUnion, TenantCloud makes it possible to run a tenant background check in order to verify an applicant, check their criminal record, employment history, prior evictions, etc. A credit check helps to view a prospect’s credit score and record of the credit history. Overall, a comprehensive tenant screening report includes a background check, a credit check and a National Eviction Records search.
Running a background and credit check via TenantCloud is a sure-fire way to find the best renters and be confident in the people occupying your rental property. When you make sure that your rental is in good hands, you can concentrate on other aspects of the landlord business.