When it comes to your investment property, you cannot hand the keys over to just anybody. Handing over the keys to your investment property can be a hard step to take, but if you take the right precautionary steps while finding a tenant you can rest easy knowing you did your homework and that you picked the most qualified tenant.
Tenant screening is a service nearly every property management firm will offer, but there are differences in what each firm looks for in a prospective tenant. At Letts Property Management, we look for a tenant that makes three times the monthly rent monthly. It is not legal to discriminate in the source of that income, but making sure the tenant can afford to live in a unit is very important.
After verifying the tenant’s monthly income, the next check is the tenant’s credit score. Credit scores typically range from 350 to 850 and most management companies are looking for something roughly in the middle at about 650 or higher. Lower credit scores are accepted at some firms with an additional deposit. Typically, the lower the credit score, the higher the chances of a prospective tenant not paying rent.
Good next steps for tenants that have met the first two criteria’s are to run full background checks and start working with references. One of the first things to check for is past evictions. Evictions are time consuming and costly and your best bet is to avoid tenants with past evictions. Additionally, most felonies will make the renter ineligible. If the background check comes back clean, proceed on to calling references.
Calling past landlords are good steps, but take things with a grain of salt when calling the current landlord. The current landlord might be motivated to get a tenant out that pays late or damages the property out and therefore might not be completely honest. Additionally, some tenants may not have a rental history, so calling some non-landlord references can suffice. When calling non-landlord references, focus on asking about the character of the person and depending on who the reference is try to find out as much as you can about the prospective tenants level of responsibility and maturity.
For more information on the key things to look for in a prospective tenant and for more information on all of our property management services, contact us today at 630-324-4267.
