Today we are sharing an educational piece on how to find the best tenants. There are more than four tips we can give you, but these four are simple and often overlooked recommendations because many landlords don’t have the time or the resources to follow them. The largest mistake landlords make is not screening tenants properly. Either they feel like they can’t do it, or they’re afraid of violating fair housing laws, so they avoid thorough screening and just keep their fingers crossed, hoping to get a great tenant. These are things you want to do not because they’re legally required, but because you want to protect your investment.
A complete credit check is required because you want to know the payment history for these applicants. You want to find out if they make good on their financial obligations. You’re also looking for evictions or judgments. It’s important to know whether they can even get utilities turned on in their name. If they owe money to AT&T, they won’t have a phone and that’s probably no big deal. But if they have outstanding debts to PG&E and can’t get their utilities turned on, that’s an issue.
You also have to look at an applicant’s criminal history. What type of person is renting from you? Find out if there are any issues with Megan’s Law, the registered sex offender database.
Speak to the tenant’s past and current landlord. It used to be easy to do these references; people would put landlord information on the application and everyone was honest. These days, you don’t know if an applicant is using a friend’s name and someone is pretending to be a landlord. You need to verify that the landlord name on the application matches the owner of the property.
Verifying employment is also important. An applicant needs income in order to pay the rent. Make sure the tenant has a job and earns enough money to pay the rent on time each month.
There are a couple of red flags to look for. For example, be wary of tenants who move around a lot or come to you with some kind of story explaining an eviction or complaining their previous landlord was a jerk. Investigate, because these claims are not necessarily untrue, but you want to find out. Speak to the landlord if the applicant claims he is moving because the previous property had a number of problems that were never fixed. You also want to guard against a high debt to income ratio. People can only pay as many bills as they have income for. Someone will not get paid if the applicant have too much debt, and you don’t want that to be you.
Tenant screening never gives you a 100 percent guarantee, and there’s always a risk. But a Pittsburg property management company can take that burden away from you and allow you to have more time to do things that are important to you. To learn more about how to find a great tenant, please contact us at Bruce Croskey Real Estate, and we’d be happy to help you.