Secret Steps For Screening Tenants That Master Landlords Use

tenant screeningScreening tenants for the first time can seem daunting, however your choice in tenants can make the next 6 months, to many years, either happy or discouraging. No matter how seasoned you are as a landlord, you need to make this process as coordinated as you possibly can. Follow these steps and you’ve tackled this task with expertise.

 

STEP #1: begins with your initial contact with the prospective tenant. You’ve posted your vacancy, ran your ads and you now are receiving responses. It’s important that you develop a series of qualifying questions, coupled with important information you will provide prior to taking that first call. I always suggest you assume the identity of “property manager”, not the owner. Using a PO Box and creating a LLC, in which rents would be paid to is great business sense.

1. Make it a point to advise them of your monthly rent and deposit needed to move in
2. Inform them of the date the vacancy will be available
3. Gather their name(s) and reasons for moving
4. Determine if they have children and the number of people who intend to live in the unit
5. Ask them to gauge their credit reports from very good, good or average, to challenging or poor. Remember that this is only an initial qualifying question. Credit reports will be mandatory for all adult tenants.
6. Ask them if they have pets, (how many etc. if you are allowing pets)
7. Ask them if they will be providing landlord references.

The manner in which these questions are answered, provided you ask them politely, will be your first impression of this potential tenant. Make notes on all of these and keep them separate from other potential tenants.

STEP #2: is the showing of the property. It’s usually a good idea to show the property to a few prospects at the same time. This will give the impression that the availability of the unit, or home, has received many inquiries. Possibly resulting in you receiving a higher rental payment than you advertised. This is, however not required.
At this point you begin to qualify your prospective tenant.

1. Did they show up on time?
2. Did they dress for the occasion? They should be trying to, at the very least, impress upon you their worthiness. If they show up looking sloppy, chances are that’s the way they live.
3. Were they polite? Their behavior will indicate, usually, just what type of tenant they will prove to be.
4. Finally take a quick look at their vehicle. How a person keeps a vehicle is often indicative of how they will take care of your property.

5. Walk thru the unit with the prospect and answer any questions they may have. Determine whether or not they are trying to negotiate rent by knit picking. (Make certain your property is ready for showing. The quality of your rental unit or home will greatly enhance the quality of your tenant)

STEP #3: involves the application and approval process. It is important that you utilize application forms that are legal and well represented in the industry. This includes your rental agreements. I suggest you utilize forms that your attorney has reviewed. A Landlord’s Attorney is a great ally and usually can recommend the proper forms, free of charge.

1. Inform your prospect when you expect the application to be completed and returned. Provide them the form at the showing and have them fill it out on the spot if at all possible. Collect any charges for credit reports
2. Review the application carefully for any incomplete information or inconsistencies. You cannot be too careful with this process
3. Submit the application to your source for credit reports. Again, Apartment Associations provide this service. Your realtor can also connect you with this necessary resource.
4. Review the credit report. If you do not know how to read these reports, gain this knowledge. Your Lawyer should happily show you how to read these reports
5. Once you’ve approved your tenant, schedule the lease signing and collection of the upfront costs. It’s also necessary to obtain copies of the adult tenant’s identification.
6. Inform your tenants that the keys and possession of the unit will be delivered AFTER the checks have cleared unless they are paying with a certified bank check
7. Make certain that all of the signatures are completed on the rental agreements, the agreements you obtained from a quality resource, and include a “house rules” form that details how you expect your tenants to behave and treat your property. Have them sign this form as well.
8. You should be very informed as to the rental agreement you are using. READ Them! Know them, and this will help you when the agreement is being signed. READ it to your prospect or be certain they have read it as well.

YOUR LAST STEP: is the move in and this can be done with or without your presence. I suggest you visit that day or a few days after to make certain they have taken possession and that the move in was completed without incident. An out of sight landlord can result in activity and behaviors unacceptable to you. Visiting your property once a month is the very minimum I would recommend and let them know you are there when you visit.

I encourage you to test the information I provide and return to give your feedback!

“you will bear no fruit if you never plant the seed” – Unknown

About John G.

I'm a full time real estate investor in NW Ohio, investing since 2007. I specialize in Wholesales, Subject 2's, Rehabs, Mentoring, Private Lenders and web based marketing. I'm your personal Residential Real Estate Engineer

22 Comments

  • 22 Apr 2012 | Permalink | Reply

    Good advice. we use rental “open houses” to save us from driving to the property multiple times. Save time and fuel and we usually get qualified prospects the first time.

    • 22 Apr 2012 | Permalink | Reply

      good stuff Charles and with these fuel prices that’s a biggie.

  • 22 Apr 2012 | Permalink | Reply

    Wow, this is something I will print for my records. Awesome and very informative! Thank You! Excellent Advice!

    • 22 Apr 2012 | Permalink | Reply

      Thanks Patricia, please feel free to share it with your friends as well or anyone you know that would benefit from it.

  • 22 Apr 2012 | Permalink | Reply

    Great information!

  • Eva
    22 Apr 2012 | Permalink | Reply

    Good info. As a property owner, in addition to a credit report, I require a very recent pay stub. The only thing I would ask others to be aware of are the fair housing laws. While it’s fine to ask how many people will be inhabiting the property, asking how many children they have can/is considered discriminatory. For good measure, I also do a criminal background check along with the credit check and prospects are informed of this when they apply. Doing a video at move in with tenant in the video can come in very handy as well. Showing them going thru each room and the condition of the property at time of move in.

    • 22 Apr 2012 | Permalink | Reply

      Eva, good tips on the criminal background check and the video walk through. I usually have a check sheet that they check off the condition of the property and they sign it.

  • 22 Apr 2012 | Permalink | Reply

    Screening tenants is one of the most important jobs. Good tenants are gold to me. If you get a bad tenant then its a nightmare for you and everyone involved.

    Read about the new laws in the UK for protecting tenants deposits. If you don’t protect the deposit, you could end up paying £1000s in compensation.
    http://www.blocman.co.uk/tenant-deposits-rules/

  • Cathleen Thomas
    23 Apr 2012 | Permalink | Reply

    Excellent article and information, thank you for sharing your knowledge!

  • Susie
    23 Apr 2012 | Permalink | Reply

    Great post! I’ll share this to my friends. I’ve got 3 friends into home rentals!

  • 23 Apr 2012 | Permalink | Reply

    John, great information but one part may get people in trouble if I read it correctly. Although as a landlord or property manager you have the right to know the number of people residing in the unit, wouldn't asking if they have children possibly trigger a complaint?

    • 23 Apr 2012 | Permalink | Reply

      Thanks for your input Mike Surgenor but it's not unlawful to ask if a possible tenant has children but it is unlawful to not rent to them because of it. A way of asking and finding this out is to request the names and ages of all tenants who would live at the residence. I'm in Ohio and based on how the law reads I can do this. BUT as a HIGHLY RECOMMENDED suggestion I would advise each person to know their state laws and possibly consult with their lawyer to make sure their questioning is within the law.

  • 24 Apr 2012 | Permalink | Reply

    Thank you for the info about screening tenants. I have some tenants that just now I met their dog and cat, almost a year after! I will use your methods next time.

  • james tsuma
    25 Apr 2012 | Permalink | Reply

    Good stuff, great ideas formulated. I have picked quite a few for my reference and implementation. Will also print to share with like minded persons.

  • Cliff Majors
    10 May 2012 | Permalink | Reply

    What about screening landlords? Just b/c the property is in good shape when you look at it doesn't mean the landlord will continue to repair/replace the things that are the landlords responsibility — in a timely manner. A credit report has nothing to do with how tenants take care of property, if possible visit their home before they move in, and you will have the best indicator how they take care of things. Not their car; I've met people that will wash their car almost everyday, but can't take out the garbage. Nevertheless, it's a good article.

    • 18 May 2012 | Permalink | Reply

      Cliff you have a valid point. in most cases the reason for the credit report is an indicator as to how the person pays debts or bills. As far as a landlord taking care of the property correctly; I would suggest that a potential tenant become familiar with Landlord/Tenant law because in many cases the law is on their side.

  • 11 Jul 2012 | Permalink | Reply

    Fantastic advice John. Any landlord looking to reduce their headaches should read this post. Thanks for putting it together and sharing with all of us.

    • 12 Jul 2012 | Permalink | Reply

      Thanks Jeff, I’m glad you liked it. Please share it with your circle and on your social media accounts.

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