Tenant Selection
Do you have rental properties that you manage yourself? Do you screen your own tenants? Here are some secrets to find the best tenants for your rental properties:
Check FICO Credit: You should use a Credit Reporting company that will provide you the rating from all 3 major credit agencies including TransUnion, Equifax and Experian. As a landlord you are making a similar decision about your tenants ability to make payments for the rent.
Job: Because employers can fire anyone At-Will, the employment criteria can be rather subjective. But make sure your tenants have not changed employers too many times. The longer your tenant has stayed in a position might be a good indicator of job stability.
Income: Depending on how much rent you are charging, you should make sure that your tenants make enough pre-tax income to that is at lest twice as much as your rent. These are the same guidelines that banks use to qualify home buyers for a mortgage. Make sure you are considering the cost of utilities and other charges that will not be included in rent.
Rental History: This is one of the most critical pieces that we use to determine the suitability of a tenant applicant for our clients. During the difficult foreclosure crises when some long term homeowners have lost their homes, they were having a difficult time providing rental references since they have been homeowners for a long time. So, use your judgement to interview them and ask for previous tenants, even if it means going back more than 10 years. You need to determine if they will take good care of your home, the same way they cared for their own home.
Eviction filings: If there is history of eviction filing in your tenants’ background, this means that a previous property owner or property manager had to resort to an eviction to vacate the property.
Bank or check writing history: If there are irregular bank transactions in your tenants background it might be a good idea to keep interviewing more tenants.
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