Aside from choosing the right property, screening tenants might be the most important step in successfully owning and managing a rental property. The right tenant can help you generate steady cash flow and a strong ROI, while the wrong tenant can cost you time, money, and stress.

5 Ways Experts Always Find the Best Tenants

Something unfortunate has happened over the past few years. As real estate prices have gone up and demand for rentals has increased, a lot of newbie landlords have become overwhelmed with all of the activity in the market. As a result, they’ve pushed aside a lot of the common sense and conventional wisdom in the industry and treated their rentals like “cash grabs.” But at the end of the day, screening tenants and looking for the best fit is still the wisest thing you can do.

Tenant screening is basically a way to protect your investment, minimize risk, and ensure a positive experience for everyone involved. And a thorough screening process reduces the likelihood of late payments, property damage, and legal disputes. This can save you a lot of time and stress in the long run.

While it may require some extra effort upfront, the benefits of thorough screening definitely outweigh the costs. You just have to know where to start.

Here are a few ways experienced property owners tend to always find the best tenants.

1. Verify Income and Employment

A good tenant is one who can reliably pay rent on time. To gauge financial stability, you’ll want to verify their income and employment. Ask for pay stubs, bank statements, or proof of income for at least the past three months. If they’re self-employed, request tax returns or financial records.

The industry standard is that tenants should make at least three times the monthly rent. While this isn’t a hard-and-fast rule, it’s a helpful benchmark to ensure they’re not overextending themselves financially.

Additionally, contact their employer to confirm their position, salary, and employment stability. A tenant with steady employment is generally a safer bet than someone with an inconsistent work history.

2. Conduct a Comprehensive Background Check

Background checks are helpful for understanding a potential tenant’s history and reliability. Use a reputable tenant screening service to look into their criminal record, credit history, and eviction history.

Credit scores provide insight into their financial responsibility. While a low score isn’t always a dealbreaker – especially if they’ve recently faced medical debt or divorce – it’s important to understand the context behind it. Look for patterns of unpaid bills, excessive debt, or frequent late payments.

Eviction records are equally critical. Past evictions can signal trouble, especially if there’s a pattern. A tenant who has been evicted multiple times may bring similar issues to your property.

3. Verify Rental History

A tenant’s rental history can give you a glimpse into what it’s like to have them as a renter. Contact their previous landlords to learn about their behavior, reliability, and how they treated the property.

As Los Angeles Property Management Group explains: “We don’t just call the most recent landlord listed on a tenant’s application. We call the one before that, and even a third if possible. We ask if the tenant was ever late on rent, if the police were ever called to the tenant’s unit, and if the tenant ever in any way violated their lease agreement. These are all questions you’ll want answered before you trust a tenant to live in your property.”

By reaching out to multiple landlords, you can paint a clearer picture and avoid being misled by a biased or overly positive reference from a single source. Yes, it requires a little more time and effort, but it’s worth it.

4. Meet Potential Tenants in Person

While online applications and screenings are convenient, there’s value in meeting potential tenants face-to-face. An in-person meeting allows you to assess their demeanor, communication skills, and overall attitude.

During this meeting, ask open-ended questions about their rental history, reasons for moving, and what they’re looking for in a new home. Their responses can reveal red flags, such as a tendency to clash with neighbors or a history of frequent moves due to lease violations.

Meeting in person also gives you the chance to explain your expectations clearly. Discuss policies on rent payments, maintenance responsibilities, and any house rules, such as pet policies or noise restrictions. This sets the tone for a positive landlord-tenant relationship.

Trust Your Gut

Your instincts matter. If something about a potential tenant feels off – even if they meet all the screening criteria – it’s worth investigating further. Maybe they’re evasive about their employment history or hesitant to provide references. These behaviors can signal underlying issues.

However, avoid relying solely on intuition. Your screening process should be grounded in facts and objective data. Document all application details, keep a consistent screening process for every applicant, and follow fair housing laws to ensure you’re making impartial decisions.

The moral of the story? Trust your gut as a final check, but let verifiable information guide your choices.

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