One of the most important jobs a landlord or a professional property manager can get right is applicant screening. The applicant you place will have a direct impact on the success you have with your investment property. A good resident will pay rent on time, help you maintain the home, and renew the lease year after year. A bad resident may be late to pay rent or stop paying altogether, leading to eviction. With bad residents, you may find property damage, illegal activities, and other nightmare scenarios.
Make sure you screen your residents thoroughly and consistently. Pay attention to all fair housing laws and provide applicants with your written rental criteria before they fill out an application, so they know what you’re looking for in a qualified resident.
Check Credit and Personal Backgrounds
Most landlords start with a credit check and a look at personal history. We suggest you do a nationwide check, and check eviction records as well. Those don’t always show up on a credit report. When you’re evaluating credit, remember that while a perfect credit score would be great, it’s not always necessary. People have debts, and they can really fall behind when they have student loans to pay back or medical bills to pay off. Instead of looking at the credit score, consider how financially responsible they are overall. If there are debts owed to former landlords or apartment buildings, you’ll want to think twice. Utility bills should be up to date.
Verify Employment and Income
It’s important to find a applicant who can afford your rent. Generally, we like to see income that’s at least three times the monthly rent. Ask for proof in the form of pay stubs, tax forms, or bank statements. If you have an applicant who is self-employed, look for stability. You need an applicant who can demonstrate he or she will be employed throughout the length of the tenancy.
Conduct Rental Reference Checks
A lot of landlords don’t bother calling current and former landlords, but we think it’s an invaluable way to screen applicants. A previous landlord can tell you how a applicant paid, took care of the property, and communicated. Always ask for contact information, and do a little research to make sure you’re actually talking to former landlords or property managers. Applicants with a flawed rental history may try to give you contact information for friends or family members.
Ask the landlord if rent was paid on time and if there were any issues with property damage. Ask if the applicant had pets, and how well those pets behaved. Ask if there were any complaints from neighbors and if the lease was followed. Most importantly; ask if they would rent to that applicant again.
These are just a few of the things you can do to start your applicant screening process. Remember have your screening policy in writing and document your process. This will protect you from fair housing claims.
If you have any questions about screening applicants in Whittier or you need help finding a great applicant, we’d love to help. Please contact us at LS Property Management.