Tenant selection is key to the success of your investment in Montgomery real estate.
To meet your financial obligations, you need your tenant to pay their rent on time and in full. Additionally, suffering high maintenance costs due to tenant negligence can make it difficult to hit that target ROI by the end of the year.
This can be avoided by having in place an effective tenant screening solution. The leading property management company in the region, Southern Realm, offers its take on tenant screening.
Characteristics of a Quality Tenant
Before we get into the tenant screening solution, you need to know what to look for in a prospective tenant.
The team at Southern Realm has identified five characteristics of a quality tenant. They include:
Ability to pay rent. A quality tenant must be able to pay rent in full and on time
Job stability. They must show evidence of employment for several years
Personality and character. This can be confirmed by requesting for landlord references
Clean record. Confirm that your potential renter has no past criminal record
Think these five characteristics as the minimum criteria your tenant must meet. But, then again, every property and its landlord are different, so you may want to look for more characteristics.
Remember that you can always add more requirements. Ensure that your screening is thorough to be able to sort potential tenants for the ideal fit.
Pre-screening allows you to detect red flags in a potential tenant early-on.
Several pre-screening tools that have worked well for our team at Southern Realm include posting an ad with your set of requirements, holding a conversation with the individual, and face-to-face meetings during the showcase.
Some of the prospective tenants will lose interest once they hear about your requirements. They might even avoid continuing a conversation with you. If your goal is attracting long-term tenants, you want to make sure they know what you expect of them before signing the lease.
Stating your basic, non-negotiable criteria for tenancy beforehand will allow you to better avoid a long and problematic landlord-tenant relationship.
The Rental Application
Every potential tenant will have to fill-in the rental application form. If you’re a new landlord, here are a few elements that you should consider adding to your rental application form:
• The tenant’s contact information
• Residence history. This includes current and past landlords’ names and contact information
• Employment history. Ask for more detailed info, for example, the length of employment, job title and salary, as well as references
• Authorization to perform credit and background checks
As a rule of thumb, only accept a tenant whose monthly income is three times the rental price of the property. This policy offers you, as the landlord, peace of mind as the renter is capable of paying the rent promptly and in full.
Another obvious way of screening tenants is if they withhold information from you in the rental application without reason. If you’re interested in the tenant, check in with them to make sure it wasn’t just a simple mistake.
If the withholding of information is purposeful, it could be a sign of trouble. You’ll want tenants that are open and honest with their history and current situation.
Income and Employment Checks
First and foremost, you’ll want to check on the credibility of the renter’s information and the references given. It’s always possible that the tenant has submitted fake references. One needs to have the experience and critical analysis to be able to spot a fake.
Spotting a ‘scam’ reference requires expertise that you might not have. Get in touch with Southern Realm and we’ll use our expertise and screening tools to help you in your search for an ideal tenant.
Discussions with Prior Landlords
As part of the rental application form, you’ll have requested that your tenants provide their current and prior landlords’ contact information.
It’s always a good idea to have a conversation with past landlords to know the type of tenant you’re dealing with. Do they pay their rent on time? Are they respectful of their neighbor’s space and privacy? What about maintenance of the property?
Similar to scam references, tenants might submit fake landlord references by offering the contact information of their friend or family member. There are a lot of good tips to try to sort out fake references from real ones. For example, try asking a question only a rental property owner would know or information about the property, itself.
This will make it clear whether you’re talking to a real landlord or not.
Financial Credit and Background Checks
Our credit checks include a credit score check, account history, and social security number verification. Our team will also run a background check where we’ll confirm whether the renter has a criminal history or has been evicted from a rental property in the past.
Communication to Tenants
If you follow the steps or advice outlined above, you should have narrowed down to a high quality tenant for your property. It’s considered polite to communicate to all potential renters about their prospects on being your tenant.
For those who have failed the screening test, it’s recommended that you communicate the reasons why in writing. Reasons that you cite must meet the provisions of the Fair Housing Laws and discuss the requirements of this law with said tenant so that they understand.
Successful applicants should receive a copy of the lease document to sign.
The success of your Montgomery rental property is relies on picking the best tenant, so why not get a team with the contacts, tools, and screening process to get the job done?
What you need is to have a professional and experienced property manager able to create a management plan that meets your demands and those of your tenants.
Rely on the premier property management company, Southern Realm Property Management.
Our experienced team is able to create a customizable service guaranteed to maximize the investment returns for your rental property in Montgomery. We’re capable of handling all your property needs from tenant screening to maintenance and even rent collection.
Get in touch with us today and receive a quote of our management services!