Before you rent a home out to a tenant, you need to conduct a thorough screening process. Today, we are sharing some things to consider when you are reviewing applications, including some red flags that should get your attention and make you think twice before approving a rental application.
Put together a set of standards that you are going to require for every application you review. It’s important to treat all prospective tenants equally; otherwise you run the risk of discriminating against some applicants, which is a violation of fair housing laws. Your standards have to be consistent.
Once you have those standards or requirements in place, it’s time to review the applications you receive for your property. Always pull a credit report, conduct a background check and verify income. You don’t want to assume that everything on the application is true. Do some checking. Get landlord references as well, so you get some idea of what kind of tenant this person has been in the past. These particular things will give you an idea of how strong the application is.
At Reed & Associates, we are always concerned about any bankruptcies that show up on the credit report for the last three to five years. If there’s a bankruptcy, it’s important that you look carefully at what was included in the bankruptcy. When someone goes bankrupt because of medical bills but manages to pay everything else, that’s one thing. It’s different when a person goes bankrupt and includes rental payments in that bankruptcy. That’s a red flag.
We also look for any judgments on the credit report that were obtained by previous landlords. If tenants could not pay their rent before, it’s reasonable to worry that they might have problems now. Always get the story behind any credit problems. If you give the applicant a chance to explain any problems on the credit report, you’ll probably get a sense of whether they are trustworthy and believable.
Finally, a red flag that you don’t want to ignore is how they act during the application Memphis Tenant Red Flags What to Look For When Renting Your Home process. If they are difficult at the front end, you might have problems with them once they are inside your house. You don’t want to set yourself up for additional headaches further into the lease.
If you have any questions about how to screen tenants, or what red flags to look for, please contact us at Reed & Associates, and we’d be happy to help you.