Screening a tenant is one of the most important parts of being a landlord. When you’re renting out your St. Louis rental property, you’re looking for a renter who will increase your ROI, not deplete it. This requires a careful screening process, which reduces your liability and sets you up for success.
The application and screening process is a short term undertaking, but it has a long reaching impact.
As professional St. Louis property managers, we have a lot of experience with tenant screenings and tenant background checks. The most critical thing to remember is that you have to maintain consistent standards that comply with all fair housing laws. Put together written and documented rental criteria and screen every applicant equally. This will protect you against legal issues and discrimination claims. Include those standards in your marketing or hand them out to tenants before they even apply.
Tenant Credit Checks and the Screening Process
A credit report can reveal a lot about a person’s financial situation. Look for financial patterns in their credit history and evaluate whether bills are paid on time. This will provide insight into what type of tenant you’ll have and whether this person will likely pay on time or need to be reminded that rent is overdue.
Specific things you should be concerned about include accounts in collection, a high debt to income ratio, and money owed to former landlords. Check for a history of evictions and any warning signs that there might be a bankruptcy or other financial distress.
Tenant Criminal Background Checks
Checking financial history is important, and looking for criminal histories is just as important. There’s a high risk to your investment property if you’re placing a tenant with a record of property damage, violent crimes, or drug convictions. You’re not only thinking about your property; you’re thinking about your neighbors and the entire community. Set some standards before you dig around in the criminal backgrounds of your applicants. Speeding fines and petty charges from 20 years ago may not matter, but convictions for recent felonies are relevant.
Evaluate an Applicant’s Rental History
Always ask for contact information so you can talk to current and former landlords and property managers. Do a little investigating to make sure you have accurate information; an applicant with problematic rental references may try to pass off a friend or family member as a former landlord. Ask the right questions and do a little digging.
You want to find out if the applicant paid rent on time, left with a balance, and provided acceptable notice before leaving. Ask if there were any complaints or problems. Did they follow the terms of the lease agreement? It’s also good to ask if the security deposit was returned and if any tenant or pet damage was left behind.
Most importantly, ask if they’d rent to that tenant again.
The final step in your screening process should be to verify income and employment. You want to be sure they can afford your rent. Ensure the income is consistent, and ask the tenant to provide documentation such as pay stubs or bank statements or tax records.
This is just an overview of how we handle tenant screening as a professional St. Louis property management company. If you’d like more information about how to protect your investment with the placement of excellent tenants, contact our team at Deca Property Management.