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A good tenant living on your property is practically priceless. After all, a responsible tenant is one you can count on to responsibly pay rent on time and take care of your property. Finding great tenants should be your top priority but sometimes, it’s easier said than done.
Before you let new renters rent your property, here are five steps you should take to ensure that you’re renting to trustworthy tenants.
1. Check credit history
A tenant’s credit history tells you a lot about your tenant’s propensity to pay (or not pay) their financial obligations on time. Believe it or not, 30% of Americans or, almost a third, have subprime credit. And although a low credit score doesn’t necessarily mean a potential tenant won’t pay their rent, it could mean they’re not responsible with their money.
But a lower credit score could be due to medical debt or other kinds of debt that are being paid off. However, if a prospective tenant doesn’t have a good credit score, you might need further verification of their ability to pay rent. Or, you may require a larger security deposit.
Here are a few other red flags you should look for on a credit report: maxed out credit card accounts, large loan balances, and delinquencies.
2. Check rental history
Obviously, a tenant’s past rental history is going to have a major influence on their future rental history. It’s important to check to see if an applicant for your property has even been evicted, it’ll show you whether or not a tenant has had issues in the past. An eviction is a red flag.
3. Tenant screening questions
Need more help knowing how to screen potential tenants? Here are some pertinent questions you can ask applicants who want to live on your property:
1. Do you currently rent?
2. How long have you lived at your residence?
3. Do you have any pets? If so, how many and what kind?
4. What is your income level?
5. What is your desired move-in date?
6. Why are you moving?
7. How many people will be living with you, including dependents?
8. Do you smoke? Does anybody you live with smoke?
9. How many parking spaces do you need?
10. What do you do for work?
11. Are there any issues I need to know about before I run a background check?
12. Have you ever had an eviction?
13. Does your current landlord know you’re moving?
14. Have you ever filed for bankruptcy? If so, how recently?
15. Can you pay the deposit and first month’s rent on X date?
16. Are you willing to sign the lease for X many months?
17. Are you familiar with the rental process and application process?
18. Do you have any questions for me about the property, rules, or rental process?
4. Background check
A tenant may look perfect on paper but in reality, their background can be peppered with questionable details. A background check provides a thorough report of a prospective tenant’s past.
With a background check, you can typically get records of evictions, criminal records, and other kinds of public records. In most cases, a background check along with a credit report gives you a more holistic picture of a tenant and any potential red flags.
5. Landlord references
Another important step to take before letting a tenant sign on the dotted line of a lease is contacting their former landlords. A landlord will give you much better insight into the tenant’s payment history and if there are any issues you need to be aware of.
Here are a few questions you may want to ask a previous landlord:
— Does the tenant have any outstanding debts owed to you?
— Would you rent to this tenant again?
— Did the tenant receive their security deposit upon moving out?
— Did you have to repair any damage caused to the rental unit after the tenant left?
— Did the tenant have a history of late payments?
Takeaways: Finding the perfect tenant for your rental
When you’re a landlord, the right tenant makes a huge difference and can provide you with serious peace-of-mind. Make sure to adequately check a tenant’s background so you don’t end up with a bad egg who’s negligent and doesn’t take care of your property. Use this article as a guide and you’ll be on the path to finding the perfect renter.