Many renters are under the impression that being a property owner, i.e. a landlord is an easy job. But the reality is that renting out your property to tenants comes with a plethora of pressure points, not least of which is finding the perfect tenant.
Renting to the right people is make or break for your rental investment. It's crucial that they pay rent on time and in the right amount. They also need to follow the terms of your lease and (hopefully) take care of the property while they live there.
Check out this tenant screening guide on the top mistakes to avoid as a landlord.
1. Failing To Run a Credit Check
Why run a credit check on a potential tenant? Because this is the best way to gauge whether they have a decent credit history by paying their bills and debts on time.
Let's be honest, it's all about the Benjamins as a Landlord. And if you have a tenant with a good credit score, you're more likely to avoid renters who don't pay their rent on time.
2. Overlooking the Background Check
Another tidbit of tenant screening advice is to always run a background check on who you're renting to. If you've seen the recent Netflix hit about Jeffrey Dahmer, that says it all. You don't need that kind of liability on your hands and you want your renters to look after your property while they live there.
Running a credit check is not enough -- a background check will bring up any red flags you need to take note of, such as previous criminal activity. Just bear in mind that you can't exactly exclude those with a criminal record due to discrimination, according to the 2016 HUD Memo. But you can consider each application on a case-by-case basis.
3. Not Actually Interviewing Tenants Beforehand
You don't have to meet your tenants in person, but if you can, it's highly recommended. Otherwise, you could always arrange a video call or an interview over the phone.
When interviewing them, make sure to get a few details on where they lived beforehand, and for how long. Ask them why they're moving, whether they've ever been evicted before (and why) if they have pets, and whether they are smokers. Talk about the type of lease they're looking for and when they'd like to move in.
Don't forget to ask for references from previous landlords and employers so that you can follow up.
4. Overlooking Proof of Income
This is one of those tenant screening tips that's similar to running a credit check. You want to make sure your tenant can actually pay their rent, i.e. they have a steady flow of income.
Ask your potential tenant for a paystub, a bank account statement, a work contract, or a letter of employment as proof of their stable income.
5. Neglecting To Cross-Check References
This is one of the best ways to get a clearer idea of who you're renting to, other than interviewing them. Cross-checking references from previous landlords can offer insight into what they are like as a tenant. It can highlight whether they're neat and quiet or caused trouble in their previous rental. You can also ask for previous employment references for further insight.
In short, it's a good way to take note of any issues that might indicate whether you need to find another candidate!
Need Assistance With Tenant Screening?
If you're new to the property investment industry in Atlanta and need professional assistance with managing your investment, look no further than PMI Property Management.
Not only do we take the headache out of tenant screening services, but we also handle property marketing, rent collection, property maintenance and so much more. Get in touch with our team for more.