“Screening tenants is easy,” is something that you’ll never hear a real estate investor say — ever. The tenant screening process seems simple, but it is much harder than it is, especially if you haven’t enlisted the services of a property management company. If you want to screen tenants perfectly, you need to know what do landlords look for in tenants when screening rental applications. It demands diligence, as you will have to identify what makes irresponsible renters. Unfortunately, these things aren’t always staring you straight in the eye.
Tenant screening is very important to ensure that they are paying rent timely, not making any trouble, not engaging in any crime, and not disturbing other tenants. It’s not possible to ensure it by just screening the tenants but you can reduce the risk by checking some things while screening tenants.
To help, we’ve put together a few things to look out for. Keep reading to know what landlords look for in tenants, so you can avoid renting out your real estate investment to the wrong tenants.
What Do Landlords Look for in Tenants Before Renting?
Why would you want to leave your investment in unworthy hands? Below, you’ll find a few things that landlords look for in tenants. And remember, not all red flags are obvious, so you’ll have to trust your gut. Alternatively, you can use a property management service that can spot the signs with 100% certainty.
#1 Low Income
Don’t be ashamed to pry into your tenant’s payslip. As a landlord, you should be aware of how much your would-be tenant earns. After all, you wouldn’t want to rent out your property to someone that can’t afford it, would you?
Aside from asking them where they work, ask for their paycheck. In general, a “good” income is at least twice the rent. For instance, if the rent costs $1,000, they should earn $2,000 or more a month.
If you ask yourself what landlords look for in tenants, what will be the first thing? Obviously, monthly income. Get ready to listen to sob stories. Tenants will try to sway you by saying how their job applications are always rejected. Even if they tell you that they’re currently job-hunting, you shouldn’t rent to them just because you pity them. If they aren’t employed, chances are that they can’t pay their rent for months. Plus, who knows when they’ll find work? It’s too risky.
#3 Low credit score
When a potential tenant has an unsatisfactory credit score, it indicates that they have defaulted on their credit card payments in the past. In other words, they owed their credit card company money. Ideally, you shouldn’t rent to potential tenants with a FICO (Fair Isaac Corporation) credit score lower than 620. If they weren’t able to pay back then, they likely won’t be able to pay now.
#4 Previous eviction
Commonsensically, why would anyone want to rent out their property to a person with previous evictions? Landlords and property management companies can’t evict a tenant unless they’ve violated their contract, for instance, if they’ve failed to pay their rent. So, if you come across a tenant that has been evicted, chances are that you’ll have to evict them, too. What’s stopping them from breaching their lease agreement again?
When screening potential tenants, consider contacting their past landlords. If they have nothing but bad things to say about the tenant, then it’s probably best to put their application in the bin.
#5 Criminal record
Tenants that have been convicted of a crime have a harder time when it comes to housing. Understandably, you’re probably concerned that a tenant with a criminal history could be a danger to the community. However, do remember that it depends on the type of crime. Know your state’s laws, as you may not be able to reject a tenant just because they’ve been convicted of a minor crime. Do your homework (or ask your property manager) if you don’t want to end up in court for a discrimination lawsuit.
Your real estate investment deserves to be occupied by the best tenants. You’ll likely end up renting it out to someone you don’t know, so the least you can do is to make sure that they’re responsible and able to make their monthly payments. Hopefully, you know the answer to the question; what do landlords look for in tenants? If you feel trouble, better yet, leave it to the property managers at Luxury Property Care. We’ll find you the perfect tenant for your South Florida property.