Renting out apartments and other housing units is one of the most profitable businesses that you can run. One of the problems with renting businesses, however, is if you end up with bad renters. Bad renters are those that cannot pay on time, damage property, and generally cause your rent property value to depreciate. Here’s how you can use tenant screening to ensure that you end up with good renters.
- Application form. First of all, create a simple application form for all people who want to rent your units. There are no standardized application forms, but in general you can create your own application forms. All you need to do is make sure that the basic facts are present, such as the renter’s name, social security number, current address, landlord’s contact details, birthday, move in date, permission to engage a credit background check, employment, salary, et cetera. If you handle lots of tenant applications, you may also include a small fee.
- Verification. Next, you will need to verify the information that the renter has provided. The first information that you need to verify is the employment history. Call the renter’s company and employer and ask about the renter. There are some renters who bloat their salary, just to make themselves more pleasing and attractive for potential landlords. These people, however, are usually those that make payment collections difficult, precisely because they do not actually have that kind of money. By asking the renter’s boss, you will be able to determine whether the potential renter actual has the salary needed to pay the monthly rent.
- Credit check. Next, run a credit check. A lot of renters use their credit cards in order to make payments. If you allow payment in credit, you need to make sure that your renter has a good credit rating. You can check a potential renter’s credit rating by using his social security number. Some renters do not provide their social security number. These should be avoided, especially since there is nothing wrong with assessing a potential renter’s credit rating. The credit rating, in fact, is one of the standard questions that landlords ask from the potential renters. You can perform the credit check online, by using websites such as Net Detective. Keep in mind, however, that you will pay a small sum for the services provided by this credit checking websites. The advantage with using these web sites, however, is that it makes credit checking very easy. Best of all, it gives you additional information apart from the credit rating. Usually, you will also find information on whether the potential renter has had convictions in the past.
- Current landlord. Another trustworthy person that you can turn to when assessing whether a particular renter is reliable or not is the current landlord. Ask the current landlord if he has had any problems with the renter, and whether he would recommend the renter to you.
With these in mind, you should be able to screen out bad renters and save yourself from headaches and problems associated with bad renters.