The Issue of Screening Tenants
There are certain facets of being a landlord that we just do not like to do. Sure, we enjoy renting out our homes and receiving the rental income that such a venture provides. However, we cannot just rent our homes out to just anybody. Really, how much income could you earn if your tenants are not paying their rent? Also, what would be the value of the rental income if the tenant has damaged the property to a significant degree? Again, this is not a good thing or something we would wish to deal with. That is why it is so critically necessary to properly screen tenants prior to renting to them. Here are a few components to screening that are important:
Determine the income of the person renting the property. This means you will need to see copies of the pay stubs from the person’s place of employment. If the individual is self-employed then you will need to see the prior year’s tax return. This will increase the odds that you will be renting to someone that can certainly afford to pay for the rental.
What happens if the tenant is an unemployed young person along the lines of the student? Then you will need to see the same employment info of the co-signer (usually a parent or guardian) as some confidence in the ability to pay is needed.
It is also certainly helpful to seek references from prior landlords. No one can give a potential tenant a better reference than the person that previously rented to the person. Ask the landlord how good of a tenant the person was. Such insight will prove quite helpful to those in need of a good reference.
Speaking of references, it never hurts to look at personal references. While they are not always reliable they can give you a little insight into the matter. As they say, you can know a lot about a person from the company they keep. As such, personal references can be quite helpful.
A credit check is of paramount importance. Does this mean someone with bad credit should be immediately dismissed from consideration? No, no one is suggesting such a thing. However, it would be best to look at a higher security deposit such as first and last month’s rent when a person’s credit rating is terrible. Some may think this is not fair but landlords do need to protect their assets.
Background checks in to a person’s criminal record should be undertaken as well. This will require the services of a reliable professional agency. While there are costs associated with such professionals, the costs are well worth it in the end.
Yes, there are a number of steps associated with screening tenants but they must be undertaken. This will ensure your home rental venture is well worth it.
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