The hardest part of being a landlord or a property manager is by far how to find the perfect tenant.
The perfect tenant is a person who….
- will take care of your property as if it is their own
- will not engage in criminal behavior
- will ask you for permission if he/she wants to make changes to the property
- will commit to renting your property for a longer period of time
- will have a steady job and will pay their rent on time
- is honest
Choosing a tenant to ﬁll your vacant property shouldn’t be a rushed process!
A bad tenant can cost you a lot of time and money, so it is better to take your time finding the right tenant.
So here are the 8 Steps you will need to follow in order to have or to find the perfect tenant.
Step 1: Set standards that every applicant must meet to be “qualified”
Standards could include things like verifiable income 3 times the amount of the rent, a credit score of 650 or above, never been evicted, maximum number of people who can live in the property, a pet policy and so on. As a landlord you get to determine what those criteria will be as long as they stay within the bounds of all fair housing laws. Then once you have your set of standards you will have to apply them consistently.
Step 2: Talk to applicants on the phone
When potential tenants contact you to tell you they are interested, make sure you talk to them on the phone before inviting them to visit the property. This is where the actual rental screening process starts. With a short phone interview you can quickly weed out tenants that are not serious and/or not qualified.
Step 3: Show the rental property
Here are some things to look for during the showing:
• Are they on time?
• Do you like them?
• Do they fit the profile?
• Do they seem to be very interested?
• Re-ask them some of the questions you asked them during the phone interview and see if their answers match?
• Do they look clean, put together?
• What is your gut feeling?
Step 4: Have the applicant fill out a rental application and charge an application fee
The filled out application and the collected fee will be a good indication if the potential tenant is serious about renting your property.
Step 5: Review the applications
Make sure to store all applications of all interested tenants for several years, use the same rental application and use the same criteria for all applicants. This way you can prove that you did not discriminate and you can also objectively and fairly analyze and compare all prospective tenants to select the best one.
Step 6: Run a comprehensive background screening report including a credit history
As previously mentioned, not everyone is honest on their application and during the pre-screening process! Background screenings should include a SSN trace, previous addresses, National Criminal and Sex Offender Search, National Eviction Search and an in depth Credit History. Running a comprehensive background screening report on potential tenants is an absolute must and is pretty easy to do these days.
Step 7: Check references
Checking employment and landlord references listed in the rental application is one of the most important steps in screening your applicant. This should include contacting the last couple of landlords, their current employer, and any personal references if available.
Step 8: Make a decision
Hopefully you have found that perfect tenant and you can have the applicant sign the lease and agree to all the rules and regulations. Congratulations on finding the perfect tenant!