Tips for easy tenant screening are a must to help find great tenants, especially for new investors. Finding the perfect tenant seems to be something of only fairy tales. But it doesn't have to be! Here are 8 helpful tips for easy tenant screening to make it easier as an investor to live life on your terms!
This tip for easy tenant screening should come first, as this will be the basis for knowing when you have found that perfect tenant. As an investor, it is important to know what kind of tenant would be ideal for your property, as you wouldn’t want a stranger in your house, so why would you want a stranger in your investment property?
Some great questions to ask yourself beforehand are what would their ideal income look like, how many people will be ideal in the given space of the property, if they smoke or have pets, etc. This will give you a great reference when you find that prospective tenant.
This is possibly the most difficult part of the screening process. Knowing what questions to avoid as a landlord is mandatory as it is possible to be penalized legally if you overstep your boundaries. Ignorance is not an excuse for broken laws! It’s a great idea to get familiar with, beforehand, what to avoid, to help ensure the tenant screening process moves as smoothly as possible!
Some examples of questions that should be avoid are anything to do with:
- Ethnic Origin
- Gender Identity
- Sexual Orientation
- Number of Children
- Relationship Status
With every prospective tenant that comes your way, a great tips for easy tenant screening is to get each of them to fill out an application form. This will help you have a better understanding of the prospective tenants financial, employment and personal information. Additionally, on this form, you can ask for permission to look up this prospects background through criminal report and credit checks.
Additionally, this application is a great idea as you can create your own to answer your main questions you have, or you can go through background checking programs to get a better understanding of the tenant. Generally, the questions should be along the lines of:
This last question is especially helpful, as you can let the tenant explain any small flaws in their background to help make you a better judge of their character. Many times, landlords take small indiscretions in the prospective tenants early years with a grain of salt. Not everyone is perfect, it’s more important to have a good understanding of what their current character is like!
A great way of getting to know who your tenant is in their free time is by checking their social media profiles. Depending on their privacy settings, this can give insight into the prospective tenants life.
This gives you a chance to cross reference information from the application to their online profiles, Granted, not all the information you are looking for will be online, but this will give you a general idea of what they claim was true.
The first step in verifying income sources is making sure that the amount of income the prospective tenant is enough in the first place. Most investors use the 3:1 rule, meaning, the tenant will be using a third of their monthly income on rent or less.
For example, this can mean if the monthly rent is $1,000 then the tenant should have a monthly income of at least $3,000. After making sure the tenant would be making enough income, we can jump to the verification process. There are many ways to verify income. Here are some great ways:
1. Pay Stubs from their current place of employment:
2. Their most recent T4:
3. Employer Phone Call:
A lot of times, investors worry about a prospective based on their online appearance. Its important to consider that you are experiencing a false positive. Are you sure that tenant from your google or Facebook searches is the same one that submitted an application for your property? This is something that happens especially for those with common names.
There are so many things to watch out for when it comes to tenant screening. And thankfully, there are so many helpful applications to make life a bit easier.
These types of companies can help landlords and property managers get access to data on a prospective tenant that is not available to regular individuals. These companies will look at not only credit scores and the tenants rental history, but it will gather other information that is crucial to know.
Examples of other information they find are debt to income ratio, employment and income verification, criminal record check, etc. This is a great way of making your life as a landlord a bit easier, as most of this information would be impossible to find without another companies help.
Here at Rock Star, we have a huge directory of tried and true companies that can help in your tenant screening process. We also have so many other real estate professionals that are easily accessible to help you, as an investor, live life on your terms. If you would like more information on getting access to this prize winning directory, you can register for our free training class, which will give you insights and information on getting more involved in this gold mine of a market!