Part of any effective tenant screening process is the background check. You cannot properly evaluate a tenant’s application without taking a look at how they have behaved in the past.
The rental application will provide you with a lot of valuable information that can be used to check for things like income and credit. We also recommend a strong pre-screening process. You can learn a lot about a prospective resident by talking together. You don’t want to waste time showing a property to someone who isn’t qualified to rent it.
These are a few tips that we find helpful when we’re conducting our background checks on tenant applications.
Establish Income and Credit Standards
We require that the combined household income is at least three times the monthly rent. That means if you’re renting out a property for $1,000 a month, tenants will need to demonstrate that they earn at least $3,000 per month. This is an industry-wide standard that will help you ensure your prospective tenants earn enough to make the rental payment on time every month while meeting their other financial obligations.
You can ask for documentation to prove the tenants earn what they say they do. Pay stubs will typically work, or you can evaluate tax records and bank statements.
We have a minimum credit score requirement as well. We look for a credit score that’s 620 or higher. Take a look at the full credit report. You don’t want to see a lot of money owed to former landlords or utility companies.
Check for Criminal and Eviction Histories
Conduct a national background check to look for any criminal history or prior evictions. When you’re checking criminal histories and eviction records, make sure you’re doing a comprehensive search that covers all 50 states.
Past evictions are almost always a red flag for landlords and professional property managers. You want to know if your prospective tenant was evicted from home previously due to unpaid rent, lease violations, or any other circumstances.
Invest Time in Pre-Screening
We respond to every potential tenant who calls to inquire about a property. We know this is unusual; many residents report to us that they rarely hear back from landlords or property managers when they call about a rental home.
It’s important to have a personal conversation with a potential tenant so you can get an idea of when they’re hoping to move, why they’re moving, whether they have any pets, and what kind of rent they can afford. We ask about what’s important to them in a property. This personal touch leads to better tenant placement and retention.
We’re busy, but we understand that tenants need personal attention just as much as landlords do. If an out-of-state tenant is moving to the area and won’t be able to see a home before renting it, we’ll do a thorough video tour or conduct a FaceTime call while we’re walking through the property.
Putting in extra effort results in a more thorough tenant screening process and a better selection of residents.
We’d be happy to tell you more. Please contact us at Southern Living Property Management & Investments. We’re a Charlotte property management company serving single-family & multifamily owners throughout the Queen City metropolitan area and in South Carolina cities in York and Lancaster Counties, including Rock Hill, Indian Land, and Fort Mill.