Avoiding problems is paramount when putting in time and effort into finding the best tenants for your rental property.
Managing tenant recruitment, screening, and selection are some of the most vital components of rental property ownership. Getting this part right leads to smooth sailing once your selected renter assumes occupancy of the home. Here are ways to ensure you do a thorough job of choosing the best tenants without putting in too much time and effort:
Companies managing rentals in Atlanta like Evernest, Mynd Property Management, and Property Services of Atlanta, Inc. do the heavy lifting of finding prospective tenants. Larger companies operating nationwide, such as the Lincoln Property Co. and BH Cos., offer similar services. Evernest has operated in Atlanta for several years, developing a reputation for reliable services at competitive rates. Among the many services Evernest offers its clients is comprehensive tenant vetting. It has offices in several states, including Tennessee, Colorado, and Ohio.
Professional property management companies have access to more information than you as a landlord. They can search databases, including doing credit checks on applicants. Many private landlords have trouble asking for applicants’ credit histories because agents do not deal with individuals, preferring to interact with other registered organizations before handing over confidential data.
When evaluating a tenant’s application, landlords cannot discriminate against prospective renters as this would violate the Federal Fair Housing Act. This legislation prohibits eliminating potential tenants based on their race, ethnicity, national origin, religion, disability, and family status, such as being married, divorced, cohabiting, or having children. Landlords found in violation of the Federal Fair Housing Act and any state regulations regarding fair housing could find themselves in a world of legal woes, including lengthy lawsuits and hefty fines. All legal action is expensive and time-consuming and should be avoided wherever possible.
The best way to stay on the right side of the law is to know it. As a landlord, research the applicable federal, state, and local laws regarding rental agreements and finding tenants. If you are unsure about the legal requirements, consult an attorney or consider hiring a property management company to handle tenant recruitment on your behalf.
Examining rental history
When tenants apply to rent your property, get them to list their previous landlords. A few calls could give you some insight into their past behavior as renters. Making phone calls can be an inconvenience when you have many other things to do, but a stitch in time saves nine, as the saying goes. It is better to enter a rental contract in possession of as much information as possible, with a clear picture of what you can expect from your tenant.
When speaking to previous landlords, ask questions about whether the applicants paid their rent on time, if they caused any unnecessary damage to the property, and what state they left it in. A landlord could provide valuable insight about a tenant, including their behavior, such as if they caused trouble with the neighbors or made a nuisance of themselves. While you might still accept these applicants as tenants despite their prior behavior, at least you will go into an agreement with them with your eyes open.
Verifying income status
As part of your background checking activities, verify an applicant’s employment status. Some prospective tenants might be less than truthful on their applications and verifying everything they say is vital. This is most important when determining that they have a job and how much they earn. Phone the employer they mention on their application and verify their employer and salary. Unfortunately, some people provide fake paystubs when filling out a rental application. A landlord should never take anything at face value, checking everything.
Where an applicant has only been working for their employer for a short time, a landlord should ask for details of their previous job and verify them by making a few calls. People with a tendency to job hop might take a similar approach when renting a home. As a landlord, you want a tenant with a steady job and income.
Income and debt
A credit check comes in handy when determining that an applicant can afford the rent. Most landlords insist that their tenants earn about three times the rental amount to avoid a default on payment. However, this is meaningless when their income is not evaluated against their debt.
Applicants with a significant debt burden cannot afford the rent regardless of how much money they earn. Ask the applicant’s permission to run a credit check, which will facilitate the process with credit bureaus.