The screening process is the most important part of placing tenants into a rental property. Individuals managing their own properties often have trouble with this because they don’t have the resources or the standards to screen tenants properly. Property owners might be eager to accept the first applicant who shows an interest in the property. This is not necessary. Other applicants will always come along; there are lots of tenants out there.
Most Grand Rapids property management companies require an applicant to earn at least three times the rental amount in order to qualify for a home. It’s important to require that percentage from the net income, or the take home pay, instead of the gross income. Not a lot of property managers have this standard in place, but it will ensure your tenants earn enough to pay their rent on time every month.
Each property management company is different when it comes to what they require from applicants; however, there are a few things you should always pay attention to. Screen for a criminal background from a national database. You should not allow anyone who has had violent felonies within the last 10 years or non-violent felonies within the last five years. It’s also important to check credit. You want to make sure you’re renting to someone who pays their utility bills and doesn’t have any evictions from prior residences.
Always define your screening process in writing. Once you have established written criteria, don’t shift from thatdo not make special adjustments for potential tenants. If you do, you could run into fair housing issues. Rejecting one applicant who meets the standards and then renting to someone who doesn’t meet the standards is going to raise a red flag, and a fair housing violation could occur. It’s possible to change screening policies as time goes on. There are unique situations which require that standard policies be altered. This is part of improving the screening process. However, once you create your standards and requirements, don’t change them for one or two applicants only.
These are some of the best practices to use when you’re setting up a screening process for your tenants. If you need help with screening or you’d like to talk more about what your rental standards should be, please contact us at United Properties.