Commercial property landlords should do everything in their power to avoid getting financially burned. Investing in tenant screening services to find quality tenants is a step you need to take.
Tenant screening should be a requirement for landlords in Provo, Utah. With the information from screening, you can decide whether a commercial applicant will be a good tenant.
Keep reading to learn tenant screening best practices to follow.
Review the Leasing Application
Commercial applicants should fill out a commercial leasing application form. Once you receive the completed form, review the information they provided and see if it's within your standards.
If you think they would be a good tenant, verify the applicant with the state. As a commercial landlord, your applicant is likely a business. Check with Utah's Secretary of State's office to make sure the business is in good standing.
If they don't have a good standing with the state, they might not be able to consistently pay rent. Decline applications from entities that aren't in good standing with the state of Utah.
Get a Credit Check
To conduct a business credit check, run the applicant through a business credit bureau screening. When you run a credit check with certain platforms, you'll receive a score of your tenant's creditworthiness based on their past payment performance.
Working with a commercial property management company can help you with the screening process. Property managers should have a network of professional services, such as tenant screeners.
A tenant screening company will automatically check a business credit score, among other factors.
Contact the Applicant's References
An applicant should have provided you with references when they completed the commercial real estate application. Contacting these references can help you verify:
- Credit history
- Bank account balances
- Rental history
Before a bank will reveal any information to you, you have to get the applicant's signature. You cannot legally screen an applicant without their consent.
Review the Business Plan
Before you rent out your commercial building to an applicant, consider asking for a business plan. Reviewing the business plan can provide you with an understanding of the following:
- Business products and services
- Target market
- Growth projections
A business plan might not be a common tenant screening requirement, but it is a best practice you should follow. This plan can help you determine if the business has a viable path to make profits.
If a business fails, they aren't going to continue to pay the rent. You can get a personal guarantee from the applicant that they will pay their rent until their lease ends even if their business fails.
Tenant Screening Best Practices to Follow
Tenant screening should be a requirement for Provo, Utah, commercial property landlords. Applicants who don't consent to tenant screening shouldn't be considered for a lease.
You can implement these best practices with the help of a property management company. At PMI Made Simple, we provide commercial property owners with quality services.
Our state-of-the-art technology and industry connections allow us to screen tenants effectively. For over 20 years, we've been offering local services to benefit landlords like you. Contact us to get started.
