Between legal fees, lost rent, property turnover costs, and other expenses involved in an eviction, you’re looking at spending $3500 or more, on average, to evict a tenant. The key to avoiding these expenses is to have the proper measures in place to find excellent tenants from the start. These tips can help you optimize your tenant screening process to find your ideal tenants every time.
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Understand the Legalities
Before you start screening, you should know the Federal, State, and local laws that govern your screening process. Some States will overrule Federal Exemptions such as the “Mrs. Murphy” Exemption.
Advertise Your Listings
It’s a numbers game. The more leads you receive the better your odds of finding a great renter. Post to Zillow and Craigslist along with Facebook Marketplace and local groups. Each platform willy vary in effectiveness by market.
Outline Clear Criteria in Your Listing
Weed out applicants before they have a chance to apply. Make your criteria clear for things like pets, smoking, and income standards, in your listing.
Make Each Tenant Fill Out an Application
Any adult living in, or paying rent for, your property should fill out a separate application. The wife might check out fine on a background check but the husband may have just been evicted.
Pre-Screen Your Applicants with a Phone Call
Showing a property takes time. Pre-screen applicants by scheduling a quick phone call to determine who meets your basic requirements before moving them on to the showing phase.
As a rule of thumb your tenant’s monthly income, should be three times your rent price. This can be adjusted based on the rental. Call employers and/or ask for bank statements to verify their income.
Ask if a Cosigner is Available
Does a tenant seem to be a perfect match, but their income isn’t high enough? Ask if a cosigner is available – and make sure the cosigner’s monthly income is at least 3x the rent.
Run a Credit Report
56% of landlords agree that, if an applicant’s credit is bad, they won’t accept them as a tenant, no matter how much they like them. Creditworthiness can show how an applicant handles money. Just be sure your applicant has given signed consent before you run a credit report.
Run Background Checks
As of July 2017 the majority of judgments and liens have been removed from credit reports. It’s a good idea to get a thorough background check to fill in the gaps left by a credit report. It’s a good idea to make sure that eviction records are included.
Pay Attention During Showings
Do applicants respect your property during showings? Are they late to the showing? Is their car filled with trash? Paying attention to seemingly small behaviors can help you narrow your list.
Check References Thoroughly
Call the previous landlord – you’ll likely get some excellent insight into your new potential tenant’s habits.
Take Your Time Sorting Through the Applicants
Take time studying the applicants who remain. Continue weeding down the pile until you feel 100% confident in your choice.
Act Like a Businessperson
It’s tough being a landlord; you want to be human and go with your gut, but you also need to treat your property like a business. Let your tenant screening criteria, instead of your heart, decide when choosing applicants.