Renting out your property is a great way to bring in income. However, finding the right tenant can be a tricky process. Whether you are handling the process on your own or delegating the task to an agent, here are the seven main things to look out for when screening potential tenants.
Proof of Income
The first thing you need to check is whether your future tenants will afford to pay rent. Ideally, their monthly income should be at least three times the rent. Pay stubs, tax returns and even bank statements would confirm whether the figures add up. But if it looks like your tenant will be spending more than 30% of their income on rent, they may encounter difficulties making payments later on.
A tenant’s credit score is like a business card for their financial responsibility. Along with the proof of income, it confirms not just that they can afford to pay rent but that they can make these payments on time. Of course, the higher the credit score, the better. Most landlords look for a minimum score of 650, but some will be content with 600.
Many landlords enjoy the financial stability that comes with a long-term lease, typically a 12-month one. Therefore, it’s wise to look for tenants with a long, steady employment history. Check if your tenant not only has a job but also if they have a habit of changing jobs often or if there are gaps in their employment. Frequent job changes can result in payment delays, as the tenant is waiting for their paycheck, or worse, missed rent payments.
Running a background check on your potential tenants is just as important as checking their credit score or employment history. For example, you’ll want to know if your tenant has been evicted in the past and the circumstances behind the eviction. If you’re running a background check for criminal convictions, always do so in accordance with the law, and be cautious of any discrimination.
References are essentially letters of recommendation for your tenant. As a landlord, you’ll want to know if your tenant has had a good relationship with their previous landlords, whether they made timely payments, and whether they left the property in good condition.
Of course, if you’re dealing with first-time renters, you won’t be able to ask for previous landlord references. In such cases, a reference letter from their employer or even a professor could be a good alternative.
Regardless of whether you have a pet-friendly apartment or a strict no-pets policy, asking your tenants if they have pets is a must. Of course, everyone wants a tenant that’s low maintenance, and sometimes, pets can complicate things. Yet that doesn’t mean you should rule out a tenant just because they have a pet. Since so many renters have pets nowadays, realistically speaking, there’s a good chance that your tenant will have one as well.
Attitude and Communication
The ideal tenant is not just someone who pays rent on time while keeping the place in pristine shape, but also someone you can have a good relationship with. Setting up an interview allows you to assess your tenant’s character in a way that credit scores and employment history can’t.
Does the tenant have a professional and polite attitude? Are they punctual? Easy to contact? Did they make sure their application was filled in correctly? Are they honest about their lifestyle choices, such as having pets or smoking? If your tenant ticks these boxes, you can be sure that you will have a professional and productive relationship for the duration of the lease.