Rental income is great when everything is running smoothly. Tenants pay on time, the property is in great shape, and you have excellent cash flow. However, things can go wrong fast when you begin working with the wrong tenant.
With the cost of evictions so high, you must do everything possible during a tenant background check to verify the quality of your tenants. Use the rental screening tips below to improve your screening process.
Understand the Law
Tenants have many rights, both nationally and locally. Landlords have limitations in what they can use to disqualify a tenant from signing a lease.
Ensure you understand the laws applicable to you. For example, landlords are prohibited from considering nationality, race, and other characteristics when determining eligibility. The goal is to create objective criteria that are fair for all applicants.
Verify Income
Understanding whether or not a tenant can pay rent is one of the biggest factors to consider when screening applicants. That's why one of the best rental application tips to follow is to get income verification from potential tenants.
Most people will be able to provide their pay stubs to prove how much money they have coming in. Many landlords use the standard of applicants making three times their rent payment pre-tax monthly to confirm income.
Check Credit
Someone's credit report is a great way to see someone's trustworthiness with money over time. A good credit report means lenders trust an applicant and have extended credit to them.
Additionally, a high credit score typically means an applicant has a rental history of paying bills on time and has no red flags. Consider the minimum credit score you find acceptable to accept a tenant.
Contact References
You won't learn everything about a tenant by looking at the number of regular background checks. These things may not tell you about unreported issues a tenant has had in the past.
Many landlords request references for this purpose. You can contact past landlords and property management companies to learn more about their experience with tenants and whether any problems arose during their stay.
Look for Evictions
Even if all the information in a background check looks good, other factors may cause a tenant to cause problems. In many cases, those problems will lead to an eviction.
During the tenant verification process, you can look for past evictions. If someone has a recent eviction in their history, it increases the chance that you'll have problems and may be better off choosing another tenant.
Get Your Tenant Background Check Right
Finding the right tenants is one of the best ways to ensure a stable rental property. The wrong tenant may not pay rent, damage property, or eventually lead to an eviction. Use the Provo landlord guide above to run a reliable tenant background check to ensure you find the right tenant for your rentals.
If you need help with the tenant verification process, PMI Made Simple can help. We offer tenant screening services along with our other property management solutions. Contact our team to ensure your next tenant is a great one.
