Tenant Screening – Don’t Let Them Lie To You! (Part 1 of 5)

October 22, 2009

Landlord Tenant Relations

Tenant Screening, and how it is done, will either make you or break you as a landlord.  Properly screening potential renters means solid tenants, and cashflow, throughout the years.   Not  doing a good job of screening applications could mean evictions, negative cashflow, and  damaged property to deal with.

For one thing, I never admit that I am the landlord. I always present myself as  a property manger, which is true since I am a licensed Real Estate Broker and perform property management for other investors, and myself.

That especially comes in handy during the tenant screening process, when the blame for making an unpleasant decision of rejecting an application can be placed with somebody else.Tenant Screening

But let’s get back to what is involved in screening prospective tenants.   Personally, I’d rather let the place sit vacant for an extra week or two, than have an “iffy” tenant, and a possible eviction, to deal with in the future.   I have very strict guidelines that I follow, as listed below:

  1. Rents have to be <33 % of the gross income (my qualifying guidelines are similar to those of a bank loan)
  2. Wages have to be garnishable
  3. Each adult has to submit their own application (so you can track them down later, or run credit checks in the future, if necessary)
  4. Different emergency contact info has to be listed for each adult (if you ever need to skip-trace a tenant, they will probably move in with the relative they list; or you can at least trick the relatives into telling you where the tenants are)
  5. Prospective tenants have to download their own credit report, for FREE from www.AnnualCreditReport.com, and submit it to me (saves me the hassle, and the cost, of pulling their credit report; also, renters can’t afford to pay $30 to every property manger they give an application to)
  6. Renters have to submit a copy of their driver’s license (so I can ensure it’s their own, and not someone else’s info, they’re writing down on the application)
  7. A copy of the paycheck stubs, and bank accounts (acct # can be crossed out) have to be submitted to me (to ensure they have their own,and not borrowed, funds to move in with; I don’t want them to start paying loans back to everyone else and to defaulting on their rents)

I will not accept the application package if it is incomplete or is missing any of the items listed above, and I will not begin the tenant screening process until I have all of the documents delivered to me.    How I verify the information on the applications is pretty tricky, so be sure to tune in tomorrow.

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