Time Tested Tenant Screening Tips

Tenant screening is quite literally one of the keys to the success of owning rental properties.

When an owner properly screens their tenants, they can have confidence in the quality of the people living in their rental properties and peace of mind that rent will be paid on time.

If you’re new to owning investment properties or are looking for tenant screening tips, this article will provide you with time tested tenant screening tips that you can use to grow your portfolio of investment properties.

Tenant Screening Tips You Should Be Using

Develop a written tenant screening criterion – This step is critical in finding new tenants because you want to establish a pattern of fairness and balance with each tenant. Your tenant screening criteria should also show that you choose tenants regardless of their gender, race, disabilities or familial status.

Verify how they get paid – 10-20 years ago it was hard to fake a paycheck stub, now anyone can go to Google Images and create a paycheck stub in minutes using the image and their favorite image editing software. This is why landlords must always verify that an applicant is still working for the company that they listed on their rental application. Doing this will help a landlord to avoid renting to tenants who only want to scam them with fake rental references.

Research the applicant online – Thanks to the Internet, and social media, it’s easier than ever before to do a background check on tenants. Doing this is important because many people aren’t afraid to post their “true” selves on social media and learning more about what an applicant is really like could save you the trouble of potentially renting to a problem tenant.

Get in touch with previous landlords – When communicating with previous landlords, it’s also important to research those individuals online to confirm that they are indeed the said landlord of an applicant’s previous renal property and not someone who is posing as a landlord.

Run background checks on adults – Don’t hesitate to run background checks on each adult living in the rental property. Doing this will help to eliminate the possibility of renting to someone who has something to hide and guarantee that you know everything there is to know about your future tenants before renting to them.

Avoid making written comments that are not based on your rental criteria – Many landlords have set themselves up for lawsuits in recent years because they made comments on their tenant’s rental applicants that nothing to do with the landlords’ rental criteria.

To avoid potential housing discrimination claims, landlords should stick with their screening criteria and not deviate from it.

Contact GoldenWest Management

Are you tired of managing your investment properties yourself? At GoldenWest Management, we can offer you a wide variety of property management services including rent collection, accounting, maintenance, customer service and more!

To speak with us about our property management services contact us today by calling (866) 545-5303 or click here to connect with us online.

Advanced Tenant Screening – Tips You Should Follow

By GoldenWest Management

SAN DIEGO, CA. – Are you searching for advanced tenant screening techniques? If so, you’ve come to the right place.

In this article, we will share with you several tenant screening techniques that you can start using today to find higher quality tenants to live in your rental properties.

Young couple moving in new place

Make Sure Your Tenant Meets Your Application Requirements

After getting the rental application back from your tenants you should check their application to make sure that their application meets all of your requirements including the following:

Photo ID – Their application must have a current photo ID.

Credit – The prospective tenant must have a credit score with seasoned trade lines (3 or more) and more than 2 years history per reported item.

Verification of Income – This should include pay stubs which show that the potential tenant makes 2.5 x Rent.

Bank statements – Should show that the application has at least six months of reserves.

Rental Verification – Must be a written statement from previous landlord or ideally a professional property management company.

Legal – They must have no evictions.

Background check – You must check their background for a criminal record via HUD guidelines.

New apartment building in suburban area

Did They Complete the Application?

After doing all of the above you should next check your tenant’s application to make sure that they filled it out completely and signed the application.

This step is important because a prospective tenant who fails to fill out their rental application may be hiding something and this could lead to you evicting them due to the information they left out on their application.

Young man with glasses working on his notebook, with a fresh cup of coffee nice and early in the morning, getting the business out of the way nice and early in the day

Contact Two of The Prospective Tenants Previous Landlords –RENTAL VERIFICATION

Instead of calling their current landlord, you should contact at least two of your tenant’s previous landlords.

A tenant’s current landlord may give them a “glowing” review (especially if they are eager to get rid of them) while their former landlord may offer you the real truth about who the prospective tenant really is.

Street of residential houses

Verify, Verify, Verify

Last of all, but most important, always verify all references that a tenant gives you.

From their personal references to income sources, it’s possible for someone to create fake references and you will only know if they are legitimate or not until you actually call to confirm and verify them.

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Get Property Management Here

For property management in San Diego, Phoenix or Las Vegas contact Goldenwest Management today by calling us at (866) 545-5303 or click here.

 

GoldenWest Management
Investment Property Solutions
CA LIC# 071791904

What is involved in screening and approving a Tenant?

Do you own rental properties or are planning on investing in rentals for the first time?

One of the most complicated aspects of owning rental properties is screening and approving tenants because tenants are the “life blood” of every rental property since if the wrong tenants are chosen they can bring major headaches for the owner.

When the right tenants are chosen the owner can often expect 12 months or more of effortless renting to a tenant who pays their rent on time, abides by the rules, and maintains the rental property.

If you’ve been thinking about hiring a property management company to manage your rental properties here is the screening and approval process that we follow at GoldenWest Management.

Determining an Acceptable Credit Score

Did you know that nearly one in two landlords said the results of a credit check were among the top three factors that they used when deciding whether to accept a tenant’s lease application or not?

At GoldenWest Management we determine an applicant’s credit score or (scoring rubric) from data we receive from the National Association of Credit Reporting.

How much in verified income do we need to approve? How do we prove income?

2.5x – 3x rent, this information can be verified by viewing an applicant’s paystubs.

If an applicant doesn’t have pay stubs we will ask for their recent tax returns or bank statements.

Once the tenant has proven their income they must also show that they have at least six months of reserves (rent x 6 months), after accounting for security deposit and first month’s rent.

Rental history

Although having good credit is still important, at GoldenWest Management we also request a tenant’s rental history because, like a credit report, rental history also shows a tenant’s rental behavior including if they have a history of paying their bills on time.

What if the tenant owns a home? As with running a credit check and inquiring about a tenant’s rental history, we will also want to know if that tenant (homeowner) has a current mortgage as well since this is also a sign of financial stability.

Criminal History

With new HUD laws outlawing or simply refusing people due to their criminal records we must know specific and relevant information about their criminal history including if they are: still on probation, a sex offender, or if they are a violent offender since this information may affect the safety and security of other tenants in the building and neighbors in the area.

Get Professional Property Management Here

For professional property management contact GoldenWest Management today by calling us at (866) 545-5303 or click here to connect with us online.

 

 

 

Investment Property Solutions
AZ LIC# CO583886000
CA LIC# 071791904
NV LIC# B1000408

Why You Hate Your Property Manager (and Why You Might Be Wrong to Do So)

Property management is a challenging business where the property manager serves two different sets of customers with conflicting needs.  As a marketer for a multi-state property manager, I have witnessed the razor-sharp line that a property manager has to  walk in his place between the tenant and the landlord.  At times, it can sometimes seem impossible to stay the course of this line, and I’ll share my insight into why that is.

The business of property management is one where the landlord compensates the property manager to relieve them of the burden of owning investment property (a.k.a, managing tenants).  The late night phone calls with repair requests, the destruction to property, the late payments, not to mention the screening of and securing decent tenants – these are all part of the burden that the property manager bears.  The owner, usually, doesn’t want to deal with the tenants, fixing up the property, or worry about collecting money.  Usually, the property owner wants to make his investment by purchasing the property, and then simply collect checks by handing over the property to the property management company.  In other words, they don’t want to do the “dirty work”.  Despite this unenvious position, the property manager must do the bidding of the owner in order to get paid.  If the owner feels that the service is not up to his standards, he can take his business to the next property manager in the area as switching costs are typically not that high. Continue reading “Why You Hate Your Property Manager (and Why You Might Be Wrong to Do So)”

Tenant Selection: How to Choose Great Tenants

This week’s topic, in our series, What to Look for in a Property Manager, focuses on the importance of Tenant selection skills.  Renting out a property presents many challenges, and the challenges becomes greater when you lease the property out to bad tenants.  Bad Tenants…they aren’t just people who don’t pay the rent on time, but those who don’t treat your home as if it were their own!  They can be destructive, and drain value from your property.  To avoid bad tenants, you must incorporate an effective background screening process.  Based on our experience, here are the top things to include in your in the due diligence process:

  • Credit – Tenant quality tends to correlate with credit scores.  Make sure to run a full credit report on tenant prospects that includes Social Security number (SSN) verification, driver’s license, and a list of their payment history on open lines of credit.  Remember that you need more than just a score.
  • Criminal Records – This seems like a no-brainer, but a surprising number of property owners don’t run criminal reports.  A national criminal report can be easily obtained to ensure that a prospective renter doesn’t have a history of violence, sex offense, destruction, or worse.  Focus on Felonies and any misdemeanors that are less than (3) years old.
  • Eviction Records – Prospects can be screened for previous evictions.  You should verify that a prospective tenant hasn’t been evicted before.  If they have, it’s more likely that you’ll have to go through the costly eviction process.  Sometimes evictions judgments aren’t recorded.  However, be sure to scour the credit report looking for collections to apartment complexes, utility agencies, or collection companies that represent landlords.
  • References – Previous landlords can bring clarity into the kind of tenant someone was.  Make sure to do your diligence and call on references.  Tenants unwilling to provide them should raise an alarm.  Be wary of unverified Landlords, such as those that don’t request a copy of the application your Tenant submitted and don’t release a written synopsis of the applicant.  Someone just “returning your call” may be a friend or relative of the Tenant and NOT the previous Landlord.

A bad tenant can ruin your property, and make life miserable.  One famous example from the GWM San Diego office:

GWM took over for a Landlord who found her own Tenants. Even though the Landlord had FINALLY obtained an eviction judgment, the Tenant had not paid rent for (4) months, and petitioned the court (and was granted) an extra 45 days in the property. On top of that the Landlord had $5000 in damage to her property, Attorney fees, and the Tenant, of course, didn’t pay their utility bills, so that meant before the NEW Tenant could have the utilities turned on, the Landlord had to pay the evicted Tenant’s outstanding invoices.  

DON’T let this happen to you!  Fortunately, many bad tenants can be screened out when the landlord or property manager properly focuses on the reports that we mentioned above.  Screening costs time and money, but is worth the investment.  Make sure to invest your time and money in tenant screening.  This is, probably, the most important thing you can do to secure your investment in your property.

Still have questions?  Contact us and let us know how we can help you with  the screening process and the all of your property management needs.

 

Investment Property Solutions
AZ LIC# CO583886000
CA LIC# 071791904
NV LIC# B1000408