Owning a rental property is a big investment. Having great tenants makes all the difference in the world. As a landlord, protecting yourself and your investment is imperative. In our latest blog, we will discuss some ways to screen your prospective renters.
First things first. When you are advertising a property for rent, be sure to include as much detail as possible. Is there an amenity within the house someone would love? Mention it! This will cut down on questions and will help to eliminate all of the people who are on the fence. Let people know exactly what they are getting and for how much. Include dollar amounts for the monthly rent as well as the required deposit, background check fee etc. Don’t waste their time or yours by dealing with people who don’t meet your standards.
Tenant Screening in Chicago: What’s Involved?
First Impressions Can Say A Lot
Pay attention at the first meeting. Are they punctual? What is their car like? Not the make and model, but is it clean and well maintained? Are they asking questions and over all, are they “put together?” Or are they scattered, late, asking for a lower deposit? You can never discriminate against someone, but you can get a feel for what kind of tenant they might be. Encourage everyone to apply, and don’t base your decision solely on the first impression.
There are tons of questions you can ask while you are showing the property. Do they have pets? How many people will be occupying the space? Ask what their monthly income is. A good rule of thumb state that their monthly income should be about 3 times the cost of rent. Ask when they plan on moving. If they haven’t yet notified their current landlord, they may not be moving in for 30 days+.
Be careful with your questions. For example, you cannot specifically ask how many children they have. “Familial” questions are a no-no and part of the “protected classes.” There are strict rules stating you cannot discriminate against protected classes: race, color, national origin, religion, sex, familial status or handicap. You can learn more about the Protected Classes on the HUD website.
- Make sure you fully review the lease with the prospective tenant so they understand the terms and rules.
- The application should be thorough and contain all needed information: Personal information, date of birth, employment information, social security number, rental history, a place for references and their signature. Also, have them sign an acknowledgment stating they are aware you will be running background and credit checks on them.
- Run the background and credit checks. There a number of third party services available to assist with this. Look for red flags and make sure the prospective tenant meets all of your criteria.
- Call all references and past landlords. People will usually put down people they know will speak favorably of them. Make sure you ask detailed questions so you can get a good gauge on their character.
- Do your own research. A quick check of social media profiles can give you a good idea of who you are dealing with? Does their employment info match what they have on Linked In?
This process will need to be done for ALL applicants on the lease. It is up to you whether or not to charge an application fee. Some landlords find the fee will deter the candidates who wouldn’t have passed the checks in the first place. Look at what running the reports will cost you, and go from there.
When to Say No
If they have ever had an eviction. It might seem harsh, but evictions are a nightmare and not something anyone wants to deal with. If you see red flags on their credit or background checks, it is ok to pull the plug.
Tenant screening might seem cumbersome and time-consuming, but it will ultimately save you time and money in the long run. Bad tenants can ruin a great investment and cause you stress and hassle.