Studies show that 18% of Americans that are renters were behind on their rent payments in January 2021. Delinquent renters can cost landlords thousands of dollars. Not only can bad tenants cost landlords money on late rent payments, but they can also cause serious property damage, lower the credibility of your complex, and more.
Finding the best tenant to occupy your rentals can provide you with peace of mind as a landlord. One way you can do this is with tenant screening.
Do you want to learn more about the benefits of having a tenant screening process? Keep reading this guide for everything you need to know about finding the best tenants for your rental property!
Create a High-Quality Listing
Creating a high-quality listing is the first thing you must do to find reliable tenants for your rental properties. This will help you generate more interest in your property and will provide you with more interested applicants.
If you have a low-quality rental listing, you may find that you only attract lower-quality applicants and have fewer options to choose from.
On your property listing, you should use photos from a professional photographer. This will emphasize the best features of your property and will make your listing stand out from others online.
Always include multiple photos of your listing and make sure that your rental property is tidy and well-lit before taking photos.
Make sure you also carefully write your listing description! Use the description to highlight the best features of your property. You should also give details about the rental, including the price, whether or not pets are allowed, and more.
Other helpful features to include on your online listings are floor plans and video tours!
Understand Tenant Laws
Before you accept or reject your tenants, you need to understand the federal, state, and local housing and tenant laws. There are some factors that you cannot use to judge a tenant. This is because the Fair Housing Act prohibits landlords from discriminating against tenants based on race, sex, religion, nationality, and skin color.
Understanding all of these laws will protect you legally and will prevent you from getting sued by your applicants.
Once you have your rental listing prepared, you should post it on several rental listing websites. There are many free websites you can use to list your property and can provide you with plenty of qualified applicants.
Even social media is a great way to advertise your property and to get the word out about openings in your rental property.
If you post your listing on one of these websites, you should also do what you can to improve your property website. This way, potential clients will be able to get more information about your property. They can also learn more about the qualifications they need to live there.
Set Minimum Tenant Criteria
When you create an application for your rental properties, you need to set your minimum tenant criteria. This allows you to set all of your expectations upfront and will discourage unqualified tenants from applying in the first place.
For example, you should always disclose information about the price of your rental property. This includes the monthly rent, rental application fees, and even the amount for your security deposit. If potential applicants cannot afford your property, you will not have to waste time screening them after they apply.
You should also set lifestyle expectations and criteria. For example, you may not want to allow pets or smoking on your property. Including this information on your listing will ensure that only people that meet your lifestyle requirements will apply.
Another criterion you may want to include is that your tenants cannot have any felonies on their criminal record and cannot have evictions on their housing record.
There is other information that you can use as your own personal criteria, even if you don’t list it on the rental application. This can include the lowest acceptable credit score, the rent-to-income ratio of your applicants, and more.
Pre-Screen All Tenants
You should also invest in tenant screening software. This will allow you to confirm your tenant’s background information and can help you avoid accepting a tenant with a poor history.
For example, you should run a credit check. What is their credit score? Have they had issues making payments on time in the past?
Your tenant screening should also include a criminal background check. While there may be some types of crime that would not affect the trustworthiness of a potential applicant, there are some things that you cannot afford to risk.
For example, if your tenant had issues with vandalism, violent crimes, or sexual misconduct, they could affect your credibility as a landlord.
Lastly, you should screen your tenants to see if they had any issues with eviction in the past. Some common reasons for eviction are if tenants violate the lease agreement, if they fail to pay rent, or even if they conduct criminal activity on the premises of your rental property.
Learning about this history can help you avoid dealing with a similar situation.
Getting all of this information from your tenant screening process can also give you a good idea of the type of tenant they would be.
Require a Deposit and Application Fee
You should always require a deposit and application fee with your application. This will ensure that only the people who are most interested will apply to live on your property.
If people know that they have to spend $50 to apply for housing, they will only apply if they know that they want to live there.
Plus, a security deposit is necessary to protect yourself as a landlord. If your renter damages your property or causes other issues, these losses will be covered by a security deposit.
Verify All Tenant Application Information
Narrowing down your list of applicants can be a time-consuming process. However, there are ways that you can easily weed out some of the lower-quality tenants on your list! The most important thing you can do is verify all of the information on your tenant’s application.
Many people assume that no one will cross-check the information they provided. If an applicant provided false or misleading information, this should immediately eliminate them from your list of potential tenants.
Some things that you should cross-check include information about their employment and income. This way, you can be sure that your tenant is financially prepared to rent your space.
You should also contact their previous landlords or other references to make sure they are reliable.
Improve Your Property
It can be difficult to attract high-quality tenants if you don’t have a high-quality rental property or if your property is located in a bad neighborhood.
While you cannot change the location of your property, you can make simple changes to your investment property that make it more appealing to high-quality applicants. Make sure you consider what types of improvements you can afford to make to your property.
For example, you may have the budget to make large-scale renovations. If not, you can make minor upgrades, like painting your property and improving the curb appeal.
Work With a Property Manager
Finally, you should consider working with a property management company. Because it can take weeks or even months to find reliable tenants, it can be a daunting process for a landlord.
If you don’t want to deal with the hassle of creating a listing, sorting through applications, and finding the most reliable tenants, a property manager can take care of the entire process for you.
Not only will they help you manage the property once it is rented, but they can also help you market and lease your property. Many property management companies will also help you create an airtight lease, screen your tenants, and more.
Working with a property manager will ensure that you find the best tenants, which can help you avoid the process of evicting a tenant in the future.
Get Help With Tenant Screening Today
When you own rental properties, it can be difficult to find tenants that meet your needs. Following each of these tips can help you improve the tenant screening process and will make it easier to find high-quality new tenants!
If you need help with tenant screening, Reedy & Company can help! We provide property management services in Memphis and can help you find reliable applicants for your properties.
Contact us today to learn more about our services and to see how we can help you choose the best tenants.