Choosing to rent out your property isn’t a decision you should make lightly. There are a lot of factors that you need to consider before taking on a tenant. Are you ready to be a landlord? Do you have a legally sound lease drafted? Do you know how to pick out the right tenant for a healthy landlord-tenant relationship?
That last question is perhaps the most important. If you don’t know how to find the right tenant, you’re in for an uphill battle when it comes to leasing your property. Here are a few reasons why it’s important to screen your tenants.
Understanding previous rental history
Before you even think about discussing a lease, it’s important to at least have a basic knowledge of your tenant’s previous rental history. Understanding your renter inside and out can clue you into a few key aspects of their behavior as a lessee. This includes previous evictions, missed payments, and whether or not the tenant has ever broken a lease. Screening a tenant also gives you insight into how they treated the previous properties they inhabited. You’ll be able to get a glimpse of any reports the landlord filed against the tenant or if the tenant was charged for any damages to the property.
By doing this ahead of time to understand a tenant’s previous rental history, you’re reducing the likelihood of future issues with a prospective tenant. You’re also weeding out undesirable applicants from the get-go, which avoids the possibility of an eviction down the road. It’s estimated that the cost of evicting a tenant is between $2500 and $3500, which is money that could otherwise be invested back into your property.
A look at financials and credit
Clearly, a tenant’s ability to pay is paramount in the approval process. After all, the passive income from a rental property is most likely why you’re considering leasing your space. When it comes to bringing on new tenants, a large majority of landlords list timely payments as one of their most pressing concerns. Taking a closer look at a prospective tenant’s financial situation, as well as their credit report, is the first step toward making an informed leasing decision.
While a new tenant’s credit score is important, a deeper look into their full credit history provides much more pertinent information. After all, a low credit score may be indicative of high revolving debts, but it could also indicate that the renter is just starting to build credit as well. A full, detailed credit report provides a broader picture of the lessee’s financial situation. You’re able to see if they have large amounts of outstanding debt, if they’re missing payments on any credit cards, if they’ve defaulted on any loans, as well as if they’ve recently decided to apply for more credit.
Detailed criminal history
Depending on your preferred tenant, a prior criminal conviction may or may not be a good reason enough for you to disapprove an application. For example, criminal reports often include minor traffic violations, which shouldn’t disqualify a tenant immediately. However, a detailed criminal report is an excellent way to make sure your property stays safe.
As a landlord, you’re entrusting your property to an individual primarily based on how they look on paper, and their criminal record is incredibly telling. Felonies, vandalism convictions, and violent criminal pasts aren’t the most enticing qualities in a tenant, and if these appear on a criminal report, you shouldn’t take them lightly. If the tenant doesn’t seem like someone you’d be comfortable leaving alone in your property, then they probably aren’t the right fit.
Choosing the right platform
When it comes to choosing a tenant screening platform, there are certain landlord software programs which offer a tenant background check free of charge. These programs are excellent if they come bundled with online payment portals and maintenance communication platforms. It’s in your best interest to find an all-in-one solution for your screening platform to ensure the leasing process goes as smoothly as it possibly can.