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.
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.
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.