The type of tenant you put in your rental property will have a major impact on your success as an investor. If you take the time to do a thorough tenant screening, you’ll get a responsible tenant who has a record of paying rent on time and taking care of the homes they rent. If you ignore proper screening techniques, or you skip it entirely, you don’t really know who you’re getting. You’ll set yourself up for a lot of potential liability and the risk that you’ll have a tenant who doesn’t pay rent on time and doesn’t care about the property.
Always conduct a national criminal background check. You’ll need to know whether your applicant has a history of violent behavior, or a pattern of drug violations. These are not typically great tenants. Make sure you set up a consistent set of criteria so everyone who applies knows that you’ll be checking criminal backgrounds.
It’s also a good idea to run a credit check on any potential tenants. You aren’t necessarily required to find a tenant who has perfect credit. A lot of people suffered through some financial problems in the last five or ten years. However, you do want to be sure that they pay their bills on time, they take their financial obligations seriously and they don’t owe any previous landlords or management companies any money. Look for evictions as well. They won’t always show up on the credit report, so make sure you check the national eviction database.
Talk to the applicant’s current and former landlords. You want to get an idea of how this tenant has performed in the past. Ask about whether payments were made on time, security deposits were returned and the lease was followed. Find out if there were any unauthorized pets or people discovered during the tenancy and whether there were any complaints from neighbors or city officials. Finally, ask if the landlord would be willing to rent to that tenant again. That will tell you everything you need to know.
Make the application process easy on yourself and your tenants. Provide an online application so they can fill it out in their homes or at work and provide all the information you need electronically. You should be able to complete most of the screening right away, and you can either approve or deny the tenant based on what you find.
If you have any questions about how to properly screen your tenants, please contact us at Abacus Avenue Property Management in Hoboken, NJ.