Your rental property is one of your biggest investments and when it sits vacant, it doesn't earn you any money. Understandably, you want to get it occupied as soon as possible but it's also important to make sure you're handing over the keys to the right sort of tenants. Being too hasty with your screening process can cost you plenty in late payments, property damage and even civil court fees. If you're looking to rent out your property, here's how to thoroughly screen your applicants.
Start With the Basic Checks
Credit, background and employment checks are the easiest ways to screen out bad tenants. You need to know if the people you're considering renting to have had issues paying their bills in the past. You're also entitled to know if they've got criminal histories and whether they're able to maintain a steady job.
While these reports are useful, they don't always come cheap. You've got the right to charge potential tenants for basic screening reports; however, if you decide not to run the report, you've got to refund their money.
While many landlords verify employment through W2 forms or paystubs, it's best to ask the potential tenant to grant you permission to speak directly to their employer. You may be able to get more concrete information from a supervisor or the company's HR department.
Talk to Previous Landlords
While the basic checks are necessary, they don't tell you all you need to know about your tenant. A person with a great credit history could be a miserable human being; a person with a poor credit score may never have been late on their rent.
For a more accurate picture of the kind of tenants they are, follow up with their most recent landlord. It's not enough to simply ask if they paid their rent on time—you should also inquire about the condition and cleanliness of the property when they left, any complaints from the neighbors, and if the landlord had any unresolved issues with them during their tenancy.
The most important question to ask while talking to previous landlords is simply "Would you rent to these tenants again?". The answer will tell you more than any paper report ever could.
Interview the Tenants
Now that you know their background and have talked to their landlord, it's time for a face-to-face meeting with your potential tenants. Ask them about their pets, their friends, their family and their jobs. Understand who they are as a person, rather than a name on an application.
Come up with a few common rental problems and ask what they'd do in each scenario. How would they handle a broken water pipe if they couldn't immediately contact you? Would they notify you if they had to leave the home vacant for an extended period of time? What would they do if finances didn't allow them to pay the rent on time?
While these may seem like fairly innocuous questions, their answers will speak volumes about their responsibility and the way they'll care for your investment.
Above all, go with your gut. If something seems "off" about them, move to the next name on the list. You've got to feel comfortable with the people you entrust with your rental property.
You need your property occupied so it can earn you money but renting to the wrong tenants can cost you more than you can afford. When you've taken the time to screen your tenants carefully, you can rest assured that your investment is well cared for. Get more tips from resources such as ABA Rental Properties Inc.