The determining factor of a successful real estate invesmtent is the quality of your tenants.
High quality tenants are the type who pay their rent on time, take good care of your property, and adhere to the terms of the lease agreement. Finding and selecting quality tenants is only possible through the use of a comprehensive tenant screening strategy.
Windermere Property Management, the leading Spokane property management company, has compiled the following tips for landlords on the best way to screen your tenants.
Step 1: The Criteria
Before you start screening prospective renters, you should sit down and set the criteria for your tenants. Also choose the process you'll use to select a tenant.
From our experience in the Spokane real estate industry, you might want to perform credit and background checks. We recommend that you research tools that will help you select the best possible tenant in Spokane.
Step 2: Pre-screening
Screening potential renters can take up a considerable amount of time. This can waste a lot of time for both you and the applicants. The applicant may also lose interest and choose to look for other options in the area. That’s why pre-screening is an important part of any screening process.
Your pre-screening should include:
• Making a list of tenant requirements.
• Asking relevant questions over the phone or through mail.
• A physical meet-up during the property showing.
If a tenant is unqualified for one reason or another, remove them from your pool of applicants. You can move on with the remaining applicants.
Step 3: Preparing the Rental Application
Once your potential renter has confirmed that they like the space, you can have them fill out a rental application.
Within this application, you should request their contact information, rental history, employment information (past and current) and authorization to carry out a credit and/or background check.
It goes without saying that failure to completely fill and submit the rental application form counts as a red flag. Another important item to check is the income level. We recommend choosing a tenant whose monthly income is at least triple the cost of rent.
Step 4: Tenant Income and Employment Checks
Employment verification serves two purposes. First, it'll allow you to verify if the tenant is able to pay the rental price. Second, it gives you a chance to check the consistency of their story. Although uncommon, it does happen where applicants submit fake references to landlords.
With the references provided to you, are you able to identify a scam? You might not have the tools and industry experience to tackle such an issue.
Rely on the experts at Windermere Property Management. Using our contacts in Spokane, we're able to conduct our own independent investigation and select the best tenants that the city has to offer.
Step 5: Rental History Checks
We recommend that you get in touch with the potential renter’s current and previous landlords.
Be careful with current landlord references, however; it could happen that a current landlord will give a positive reference just to get rid of a bad tenant.
Always request for the prior landlord’s contact information as well. This is the perfect opportunity to ask critical questions that will give you a feel of the person you're dealing with.
Similar to the above section, you might find a tenant who has given fake references. They might have a family member or friend pretending to be a prior landlord. To verify such information, ask in-depth questions about their property ownership or leasing before inquiring about the tenant in question.
Step 6: Analysis of Credit History and Background Checks
A credit history check will reveal the financial capabiliy of your renter. You don't want a renter who spends a significant amount of their income paying for loans and other liabilities.
As a rule of thumb, we recommend that you only accept tenants who have a credit score of 680 or above. Also ensure that their outstanding debt will not impair them when it comes to paying rent.
Background checks include checking prior evictions, criminal history, and social security number verification. At Windermere Property Management, we offer comprehensive screening as part of our property management services.
Step 7: Communication with Shortlisted Tenants
If a prospective tenant meets the above criteria, the next step is to call them in to sign the lease agreement. You can also choose to send them the document online and have them use an e-signature.
For tenants who don’t meet your criteria, it's only courteous to let them know. An email works best for this.
We should also note that you should only reject a tenant if you have a legal reason to do so. According to Washington Landlord-Tenant Laws, it's illegal to decline a potential tenant’s application based on their age, sex, gender, ethnicity, or religious/cultural practices.
However, if you follow the tips offered above and only decline an application based on credit, employment, landlord references or income checks, then you will have no issues.
The Premier Spokane Property Management Company
Tenant screening is the first line of defense against a problematic tenant. It will protect your Spokane property by preventing income loss, damages, and the need to evict a tenant.
If you need help finding and screening great tenants for your property investment, call Windermere Property Management. We're a full-service property management company offering customized property solutions.
With us as your property manager, you can enjoy stress-free property income. Our services offer peace of mind, a higher ROI, and happier tenants.
Reach out to us and receive a free quote for our exceptional property management services.