The Census Bureau recorded nearly 20 million rental properties in the United States. Each of these properties is filled with tenants that property owners and property managers rely on to turn a profit.
You can reduce your financial risks when you implement a robust tenant screening process as you find a tenant. Keep reading to learn more about why tenant screening is important for your real estate ventures.
Why You Must Screen Your Tenants
Having a reliable screening process is essential when running a rental property. Landlords should conduct a screening process to minimize the risk of financial ruin.
You can count on a trustworthy tenant to consistently pay their bills and effectively maintain the property. Doing thorough screening can help you mitigate the damage of reckless tenants, late payments, and eviction. Some property management companies opt to sift through this information independently while others choose to outsource to experts.
Elements of Screening a Tenant
While managing a property you should make data-driven decisions. Comb through prospective tenants' applications and history. This can help you make a calculated risk rather than going in blind.
By reviewing an applicant's credit, rental and criminal history you can better gauge what kind of tenant they will be. Landlords take a deep dive into prospective tenants' applications before finalizing their contracts.
By obtaining a resident's credit report a landlord can determine whether or not they can afford to live at the property. A credit report will show the tenant's outstanding credit card debt and timeliness when it comes to paying their bills.
Rental history is incredibly valuable to a landlord. By looking at your tenant's rental history you can determine how they will care for your property and see if they have been evicted. These reports help you uncover how they have interacted with other landlords in the past.
A thorough background check will help you find any evidence of criminal history. Responsible property owners need to remove any prospective tenants with a criminal record from the cue. Convictions should immediately be ruled as a red flag.
Interviews and Applications
In addition to pulling these different reports, landlords should do their own deep dive. By interviewing potential tenants on the front end you won't be blindsided.
Requiring references is a great way to learn more about a tenant. You need to be hesitant about weighing personal references too heavily, as many friends would fluff these references.
Look to the Experts for Tenant Screening
Tenant screening takes a close look at the financial and rental pasts of prospective tenants that are applying for a rental property. By critically reviewing people's history you can learn more about their future.
Property managers should feel confident that they can trust their tenants to care for the property and pay bills on time. Contact us at Renters Warehouse Hampton Roads for all of your property management needs.