For months now, you have been preparing your property for the rental market. Your hard work, time, and money are all on the line when you hand the keys over to a new tenant, and as a landlord you want to be sure that your investment is in good hands. For a first-time landlord it's understandable to be wary allowing a new tenant to live in your property. However, taking the proper steps during the application process makes it easier for you to find a tenant that meets your requirements and, hopefully, will become a long-term renter.
One thing is for sure: Empty properties don't make any money, so it's important that you fill your property with a tenant as quickly as possible. This can easily be done if you keep a few things in mind when screening new tenants. First, create a tenant application form and ask for basic information, e.g. name, current address, and contact info. Be sure to include a section where the tenant can provide employment history, social security number and references so you can do a background check easily. Make sure the prospective tenant signs and dates the application.
Once you have the prospective tenant's information, submit it to an online tenant screening service that will check the tenant's credit score, criminal record, bankruptcies, foreclosures, employment history, and any other red flags. The prospective tenant's history should be a clear indication of whether you want them living in your property
Talk to Employers or Former Landlords
Using the references from the application, contact any former landlords or employers as part of your tenant screening process. Ask the references if the prospective tenant was punctual, hard working, and overall a good employee. When speaking to a former landlord, remember to ask if the tenant pays the rent on time, treats the property with respect, and if they would rent to them again.
Verify the Tenant's Income
When the applicant applies, be sure that they include a pay stub, W2, bank statement or tax document. These documents will make it easy for you to verify how much money they make and whether they will be able to afford the monthly rent. A simple trick landlords have used is the "Rule of 36". Take the applicant's yearly income and divide by 36, which will give you an estimate of what the tenant can afford monthly. If the numbers don't add up, the applicant should not be accepted as a tenant.
Sometimes applicants will not meet your standards but despite the reason, be sure to be kind and polite, yet truthful, about the reasons for the rejection. The tenant has the right to know why they were rejected. Also, give them a chance to explain themselves; they still may be worth considering the more you get to know them.
Now that you have completed the tenant screening process and have selected a suitable tenant, have them sign a lease that includes all the property rules: no pets, no smoking, and maximum number of occupants are just a few common rules. When you hand over the keys, realize that this tenant is an investment that provides you with a monthly income. Problems at the property should be taken care of quickly but, otherwise, the tenant's privacy should be respected as if it were their own home. Happy tenants make happy landlords, and with a solid landlord-tenant relationship you can feel good about putting a roof over a person's head while enjoying the benefits of monthly income from your property.
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