Placing a good tenant who pays rent on time and takes care of your property requires a thorough screening process. There are three ways to screen tenants for your next rental property.
The first method of tenant screening is what we call self-screening. This is where the owner handles the screening. An owner may check references, verify work history, and check into a tenant’s background as much as they can. Once they gather all this information, the owner can decide whether or not to rent the property to the person who has applied. Years ago, when I was buying investment properties and managing them myself, I went to a seminar. The speaker recommended when you have a guest viewing a property to pay attention to the condition of their car and if the person is local, perhaps drive over to where they live and get a look at how well they take care of the property. If you are feeling bold, you could knock on the door and confirm the applicant actually resides in the home.
All that may sound like common sense, but I do not recommend you do that. A good attorney could argue that you turned down a tenant based on your own opinion. Fair housing laws are pretty strict, and what you do for one applicant you have to do for all applicants.
Use a Tenant Screening Company
Companies that screen tenants for you are easy to fine. An applicant can send in their information and the company will use metrics, history, and data to make a recommendation on whether to accept or decline the applicant. If you use this method of screening applicants, I encourage you to follow what the screening company recommends.
Hire a Property Management Company
With a professional property management company, you get all the benefits of the tenant screening company as well as a local company that is able to do a little more. If the applicant is currently renting a home that’s managed by another property management company, in many cases they can share information about whether rent is paid on time and the terms of the lease are being followed. This is a great opportunity to get an extra layer of protection.