As a landlord, it might be tempting to immediately accept a tenant who is interested in renting your unit. It’s not easy to market rental units and finding a seemingly good prospect might make you too excited, to a point where you will be lenient in conducting background checks.
It’s very important to screen your applicants as thoroughly as possible. This could be a tedious process but there are ways to make it a bit easier.
You can start by dividing your tenant search into two phases: Pre-screening and Screening.
PRE-SCREENING
The goal of pre-screening is to narrow down applications to genuinely interested and highly qualified applicants.
You can start by registering your property listings to platforms like Padleads.com. The platform allows you to upload listings of your rental units, which can contain all the basic information like location, neighborhood, features, amenities, photos, restrictions, and many more.
Your listing can be accessed by a wide market of potential tenants because Padleads syndicates your listings to high-traffic rental websites.
If you have informative listings, it’s easier for a client to evaluate if your unit is a good choice for them. This already narrows down potential applicants to genuinely interested ones. You may match with a large volume of clients but you don’t have to gather a ton of documented information from them just yet.
Because they can reach you directly through Padleads, they can discuss their additional queries and you can also start the pre-screening process. Since this will be an online conversation, it wouldn’t require too much effort on your end.
These are the information you should try to get during pre-screening:
- Get a glimpse of their credit score and income. This doesn’t require a full background check just yet. Just get a general idea of their financial status to help you gauge their capacity to pay rent.
- Double-check if they have reservations with any information from your listings. Make sure they’re aware of your restrictions like the number of occupants or pet policies.
- Know their anticipated move-in date. If your goal is to fill in a vacancy as soon as possible, you might not want to entertain a prospective tenant who plans to move in after a few more months.
Those who pass the pre-screening would most probably request a virtual tour or an in-person tour of your unit. If there aren’t any conflicts after that, then you are ready for the screening stage where you actually conduct full background checks.
SCREENING
By this time, you already know that the features of your rental unit match your clients’ needs and they are aware of landlord rules and restrictions. The next step is to verify their capacity to pay rent and if they will be responsible tenants.
Ideally, here are the things you should make sure of:
Stable Employment and Steady Income
Know the combined income of all the future occupants of your unit. You can determine that they have the ability to pay if their combined monthly income is at least equal to 2.5 to 3 months’ worth of rent.
Emergency Fund
Your applicants should not be living from paycheck to paycheck. Know if they have enough liquidity in their bank accounts that could cover their rent if they get laid off from work. Having an emergency fund is a good sign of a good tenant.
Good Credit Standing
Gauge their historical creditworthiness. Check their credit score from credit bureaus. A score of at least 650 is usually the benchmark for an applicant to be considered qualified.
However, some may have a low score because they always pay cash or through debit or they have previous medical bills or student debt. So a low credit score doesn’t automatically mean that they are irresponsible with their bills. You’d be lucky to have a tenant that’s financially stable enough to have no history of debt.
No Bad Rental History or Criminal History
Learn about their previous tenancies. Having a history of tenant-landlord lawsuits or eviction due to illegal activity are huge red flags. Other red flags are late rental payments, an altercation with past neighbors, and bad overall attitude. You can contact their previous landlords for this information.
VERIFIED INFORMATION
In order to verify all the information above, make sure that your prospective tenant can provide all the authentic documentation that would support their claims. You, on the other hand, must make extra effort to do background checks if you see any inconsistencies in their application.
Now that you know how to find the ideal tenant, register to Padleads now so you’ll start screening applicants in no time!