Renting a property can be a nightmare. Sometimes you end up with renters who do not pay their rent or who trash the property. It is not always easy to find a good tenant which is why you need to know how to screen a potential renter. There are steps you can follow to increase your chances of finding a responsible renter.
Before you start to rent out a property, you will want to create a renter’s agreement. You can work with your lawyer to create a simple but legally binding contract that will need to be signed by any new tenants.
Ask each potential renter to complete an application before renting the property to them. The application should ask for their name, current address, former landlords and employment details. You can also ask them to provide references that you can check before renting the property.
You can perform a background check on a potential renter. There are many online services that charge a small fee and will allow you to perform a criminal background check. You can ask a potential renter for consent to check their credit report as well. In order to do so, the potential tenant will need to provide you with their social security number. By checking a potential renter’s credit, you will have an idea as to whether or not they are likely to pay their rent without problems.
Keep in mind that if you do check a potential renter’s credit, you will need to send them an adverse action letter if they fail the credit check. This letter will need to state that you are rejecting their application to rent a property due to information in their credit report. You can list the negative information used in your decision. State that they are able to order a free copy of their credit report from the credit bureau you used if they send for the report in sixty days or less. The letter will need to list the contact information for the credit agency you used to pull their credit.
Call the references they provided on their rental application. Try to determine if the tenant is responsible and whether or not they might cause any problems if they rent a property from you. You will also want to contact their past landlords to obtain more information about their rental habits and history.
Check with the potential renter’s employer to verify that they are employed. You will want to know that they have an income and will be able to pay their rent. If someone is unemployed but is receiving disability or retirement income, they might still be a good renter.
If you have decided to rent a property to someone, you should ask for a deposit. Make it clear that you will ensure that any checks clear without difficulty before they will be given keys to the property. If the check does not clear, you will want to look for a new tenant.
Carefully evaluate any potential renters to reduce your risk of selecting a poor tenant. The time you spend on screening potential rentals will be worth the effort.