Finding the right tenant in Salt Lake City is the most important step in renting out your home, but it’s not without its challenges. Often, landlords can be lured in by a prospective tenant who presents themselves well, has cash ready, and wants to forgo the tenant screening process. However, accepting these kinds of applications can spell disaster. How so? This article outlines why screening every tenant is essential and how to start the process.
Good tenants give you a good reputation.
Your reputation as a landlord is on the line with every tenant you lease to, so having screening procedures that include thorough background checks are imperative. Landlords should screen each tenant to make sure they are the right fit. This keeps the community safe and sound while also protecting your reputation as a successful and trustworthy landlord.
Tenant screening makes your property an asset.
Acquiring a property can start as an asset, but maintaining the property keeps it that way. Your Salt Lake City rental property’s success can greatly depend on how you manage it and who you lease it to. Hence, it is appropriate for the landlords to dig deeper to know their prospective tenants well.
Tenant screening can keep it profitable in the long run because it teaches you two major things about the person. First, you can learn if they can pay the rent on time and in full. Secondly, you can ensure that the tenant will keep paying the rent. Including financial, employment, and personal information of the tenant on your rental application form and cross-referencing that information with past landlords and employers can get you a better picture of the prospective tenant’s financial stability.
Tenant screening saves money and stabilizes income.
Failure in doing tenant screening may lead to tenants moving out with no payment or could even turn your investment into a possible liability. Imagine what could happen if a tenant destroys your property and then leaves without paying for it. Not only do you have to pay for the repairs, but you’d also have the added expense of suing them in court. Screening tenants meticulously minimize the risk of this happening.
How to Properly Screen Tenants
So now that we’ve covered the importance of tenant screenings, how can you get started? First of all, it’s important to know what you can and can’t ask. The federal Fair Housing Act prohibits discrimination in the rental, sale, or financing of housing based on race, color, national origin, religion, familial status, and disability. That being said, there is plenty of useful information you can learn about a prospective tenant that abides by the law.
Rental/Mortgage History. Verify current and previous residences from the last six months to up to five years helps you determine whether applicants will be good tenants. Any applicants with a rental eviction record or an unresolved debt with a previous landlord is most likely not a good fit for your property.
Employment/Income. Verify current employment or another verifiable source of income like social security or retirement income. The combined monthly gross income of all applicants should be equal to at least three times the monthly rent amount.
Credit History. Request a comprehensive credit report from a credit-reporting agency. Look for things like recent bankruptcies, outstanding utility collections, or low credit scores as red flags. If a tenant has a low credit score of 525 or below but is otherwise a good candidate, you can consider approving them with some stipulations, like increased rent, increased security deposit, or first and last month’s rent upfront.
Criminal History. An applicant convicted of a felony in the past four years or any felony/misdemeanor convictions involving violent crime or the manufacturing/distribution of a controlled substance is not a good fit for your property.
There are some additional questions you can ask during your screening process, as well. For example, it is a good idea to find out how many people will be living in the home. Allowing no more than two people per bedroom will mean less wear and tear on the property. Asking if the tenant owns any pets allows you to charge an extra deposit that protects against any damage the animal does while the tenant lives there.
Completing your due diligence in selecting a quality and qualified renter for your Salt Lake City investment property is time and money well spent to ensure a prosperous and healthy relationship for you and your renter in the future. Many busy landlords have delegated this task to a trustworthy property management company with excellent results. If you’d like to know more about how we can help you screen tenants, please contact us online or call us at 435-244-3394.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.