You have spent a lot of time preparing your property to hit the open market. Half the battle is finding people you can trust to fill the vacancy. You’ll want qualified and reliable residents who will take care of your property like it’s their own. Spending the time to screen tenants thoroughly can save you resources and headaches.

Qualities to look for when you screen tenants

You want a resident that will leave the property in good condition, like it was in when they first moved in. You won’t have to spend as much time or money replenishing the property’s shape if it’s left in good hands. This will allow you to get ready for the next tenant quicker and give you the ability to give your tenants their deposit back.

Good communication is a key quality that you want to look for. A resident that can turn in maintenance requests on a need-be basis and in a timely manner can prevent a simple fix from growing into a bigger issue. They must communicate with you If they need a couple extra days to pay rent, or want to move out a couple of weeks before the lease is up. You don’t want to spend your valuable time nagging your residents to get a response.

Almost hand-in-hand with good communication is respect. These signs may be: a tenant who takes the time to communicate with you, pays rent as scheduled, and ensures your property is well taken care of while they’re living there. You want the process to be as smooth as possible for both you and your residents.

One of the easiest ways to get a good read on a potential resident is to meet them. The best way to do this is to have an in-person showing of your property. You can still get a good sense of what the potential residents are looking for and if it’s a match for you while following current CDC guidelines. Be extra thorough when communicating via phone call or email. It is a little harder to read someone through these channels.

Mastering the tenant screening process

You will spend more time and money on marketing efforts and property upkeep the longer your investment sits vacant. However, you may not want to accept the first application you receive from a prospective resident. A bad tenant could cost you thousands of dollars.

You may find that a tenant severely damages your property while they live out their lease term. Appliances could be broken and you might need to spend more money on extra cleaning that you weren’t budgeting for. You’ll want a tenant who pays their rent and utilities so you aren’t scrambling to cover for them on a consistent basis.

Evictions can cost you. You could end up paying court and lawyer fees, and then preparing your property to be rented back out. You can expect to be out a couple month’s rent, or longer, when you have to evict a tenant. This is why learning how to screen tenants is essential in ensuring the profitability of your property.

We have a thorough 37-point application process that’s user friendly for both the applicant and our investors. We’ve screened a tenant or two – so we’ve put together a simple step-by-step process on how to screen tenants.

Step 1: Require a Landlord Reference

“Landlord references are super important. We try to get three years of residential rental experience,” Angela Canelos, RPM Iowa’s Resident Relations expert said. Canelos is a part of RPM Iowa’s tenant screening process team. “Sometimes they don’t have the history because they’ve owned property instead. So double checking the county assessor and their credit history is another way to go about that.”

Ask their previous landlord(s) if the potential tenant has paid rent on time, if they left the property in good condition, and if they gave sufficient notice when moving out. Lastly, ask if they would rent to them again – it’s a good segway question to an honest answer.

Step 2: Check Their Credit

“We don’t necessarily focus on the score because we go a little deeper,” Said Canelos. “Sometimes a person’s credit score will be lower due to medical bills or student loans – you just want to be sure that payments are made on time.”

If a potential tenant is showing a history of not paying expendable bills, you may not want to lease to them. Do a little extra research when you screen tenants. Bankruptcies, collection accounts, several unpaid balances, or maxed-out credit cards are things to look for.

Step 3: Do a Background Check

You’ll want to be aware of past evictions, criminal records and public records. Pay attention to the frequency and severity of charges, and if the potential tenant is currently involved in a legal battle over financial matters. This can pull together a better understanding of your tenant.

Step 4: Ask for Proof of Employment

This will show a tenant’s ability to pay rent. Ask for two pay stubs and ensure that they are recent so you are sure they have a current stream of income. Most property management companies will require this, so it’s a good rule of thumb to follow.

Step 5: Go Over Lease Agreement Rules

If you find that everything seems ready to go, double check that the resident can follow the lease agreement. You may have clauses about smoking in the house or on the property, your stance on large gatherings or parties – so you want to be sure that your tenant is good with the rules.

The key to learning how to screen tenants

Properly screening potential tenants can be the difference between a great or a terrible experience. Having high turnover rates can cost you money and valuable time. You’re ready to lease your house, and knowing how to properly screen tenants can put you on the right path to financial freedom. If you’re looking to be an investor and not a landlord, consider investing in a property management company that can find good quality tenants for you.