 |
| Image Source: torontosun.com |
The quality of your property management experience, including your net return, relies heavily upon the kind of tenants you have as residents. This is why it’s crucial to do a thorough screening when selecting tenants for your best chance at a right fit for your space. Here’s my 5-step guide to screening tenants.
1. Evaluating first contact: Rental candidates will contact you by phone or email for more information and to set up viewings. This initial contact is a great opportunity to pre-screen would-be tenants. If you’re chatting by phone take notes throughout the process. Ask things like:
How long are they looking to rent? If you’re interested in a short-term lease, but they’re looking for something longer-term, identifying this mismatch now saves you both a wasted showing.
• When do they need to move in?
• How many occupants will be moving in and what’s their relationship to each other?
• Do they have pets?
2. The viewing: When you’re showing the unit to prospective tenants, treat this as an in-person interview. Before the showing review your notes from your initial contact. You’ll be covering many of the same questions in a different context and want to ensure the answers you get don’t diverge. Some red flags to be aware of:
• Was the candidate late for the scheduled showing? This tardiness might extend throughout your relationship if they become your tenant.
• What was their general attitude like? Did they find reason to complain about the property or seem easily put-off or putout? Were these annoyances used to negotiate a price reduction?
3. The rental application: Common information to request includes personal information (full legal name, a piece of identification, current address, phone and email address, and date of birth), residential history (contact information for landlords and previous home addresses), employment history (status of employment, supervisor contact details, income), financial obligations (outstanding debt or ongoing obligations such as alimony), personal references, and emergency contact information. Be sure to receive a potential tenant’s express consent to commence the due diligence process including for credit and criminal reference checks.
4. Due Diligence: As best you can, authenticate the reference information provided and assess the feedback you’re hearing from references. Do a little investigative work by looking up phone numbers to ensure they correspond to the names and organizations you’ve been given.
When calling a landlord start the conversation with “I’m calling about your rental unit”. If a friend has offered to stand in as a landlord reference, this question tends to be enough to catch them off guard. Typical questions for landlords include whether rent was paid on time every month and about damage to the unit above expected wear and tear.
For work references, ask employers about the length of the candidate’s employment and if this job is expected to continue. Run a credit check using a company that provides a credit score, even if the candidate has provided their own. This report helps you understand the candidate’s big financial picture including obligations and payment habits, allowing you to gauge whether rent will be paid on time.
5. Go with your gut: The property management business is a nuanced field and this is where experience pays off. In the absence of experience, go with your instincts on a candidate. You’re about to embark on a long-term relationship with a valuable asset at stake. Be confident in your decision, as a vacant unit is preferable to a troublesome tenant.
And once you’ve found your dream tenant, do nurture the relationship!
Follow this Applegate Property Management Facebook page for more tips on handling properties and tenants.
