If you’ve ever rented out a property before, you know that the right tenants will have a huge impact on whether you have a great experience or a terrible experience. Finding those fantastic tenants takes a bit of work, and it also involves some strict and consistent screening.
When you’re looking for the best Memphis tenants, implement some of these screening practices to ensure you’re placing a resident who is likely to pay rent on time, take care of your property, follow the requirements of the lease agreement, and stay in place for more than just a year.
Know What You’re Looking For: Qualifying Standards
One of the best ways to get started screening tenants is by establishing a set of standards and criteria which will be applied to every application you receive.
When you have a written set of rental criteria, you’re letting your potential applicants know exactly what you’re looking for before you approve a tenant. This demonstrates that every applicant is treated fairly and consistently and held to the same standards. It also saves time for you and your applicants. If a tenant knows they won’t qualify based on your standards, they won’t bother applying. Provide these written standards to all of your prospective applicants. Let them know what your screening process is so that you’re transparent and fair.
Conduct National Criminal and Credit Checks
Check for criminal history. Search databases nationwide, and look for past evictions as well. Review a prospective tenant’s credit score and credit report. You may have a difficult time finding a tenant with perfect credit, so don’t hold your applicants to impossible credit standards.
This doesn’t mean that anything goes. You want a tenant who takes financial responsibilities seriously. Review past debts and make sure no money is currently owed to former landlords or management companies. Look for overdue and unpaid utility and housing bills. These will be red flags.
Employment and Income Standards
You are looking for tenants who can afford rent. Moving in a tenant who doesn’t earn enough money to meet their obligations will only result in disaster. Don’t set them up for failure. The standard best practice in Memphis property management is to look for income that’s at least three times the monthly rent. If your rent is $1,000 per month, you’ll want to know your tenants earn at least $3,000 per month. When you have more than one adult moving in, their combined income should meet that standard. Ask for verification in the form of pay stubs, tax forms, or bank statements.
Examine an Applicant’s Rental History
You’ll need to understand a tenant’s rental history, and you want to make sure landlords have had positive experiences with this tenant in the past. The way a tenant has treated landlords and properties in the past is a good indication of how they perform in your property.
Ask for landlord references, and talk to those landlords and property managers about whether rent was paid on time. Ask if there was any property damage beyond wear and tear, and if the tenant had pets. Find out if the lease terms were followed and if enough notice was given before the tenant moved out. Always ask if the landlord would be willing to rent to that tenant again.
Once you have all the data you need from your screening process, you can make a decision about whether the applicant meets your requirements. A good screening process allows you to find the right tenant and protects you from hassles and problems in the future.
This is the process we follow, and we’d love to tell you more about how we embrace practices and procedures that lead to better rental outcomes. Contact us at CrestCore Realty for any help with Memphis property management.