The newsLINK Group - Screening Tenants

Editorial Library Category: Multi-Family & Property Management Topics: Tenant Screening Title: Screening Tenants Author: newsLINK Staff Synopsis: If you check out the reviews for everything from restaurants and movies to the next book you plan to read, it only makes sense to also screen tenants before allowing them to move into the apartment complex you manage. Editorial: Screening Tenants 4064 South Highland Drive, Millcreek, Utah 84124 │ thenewslinkgroup.com │ (v) 801.676.9722 │ (tf) 855.747.4003 │ (f) 801.742.5803 Editorial Library | © The newsLINK Group LLC 1 If you check out the reviews for everything from restaurants and movies to the next book you plan to read, it only makes sense to also screen tenants before allowing them to move into the apartment complex you manage. That process is a balancing act between your own judgment and instincts about a person and the information you uncover during the screening. The unfortunate truth is that once a bad tenant moves in, getting that tenant to move back out again can be a miserable process. You might end up with no rent or partial rent, a damaged apartment, and angry tenants. That’s the recipe for a frustrating, headache-filled experience you will remember for a long, long time. Of course, you will also want to be very careful about not crossing the boundary as far as privacy is concerned. Be sure to familiarize yourself with the local laws governing the landlord-tenant relationship. As an apartment manager, you probably have the following goals as you proactively manage the risky side of renting: Minimizing bad debt Keeping units filled Screening potential tenants might cost a little time and money, but when you compare that cost against the benefit of avoiding an unpleasant experience, there’s just no question that the cost is more than worth it. Besides, the cost is usually a minimal one. Do more than check with the credit bureau data, though. Credit data alone won’t give you a complete picture. The first decision to make is how you want to have the screening done. You have some options. You can: Hire a rental property management company Screen tenants yourself Use an Internet-based screening service Rental Property Management Companies This is probably the most expensive approach, but that doesn’t mean it isn’t the right one. You can eliminate many (but probably not all) headaches by using a reputable management company. Management companies can do the following: Look for potential tenants Screen them Handle the leasing agreements Bill the tenants In exchange for all that, you pay a fee. How big a fee? It varies, of course: price depends on how big the property is and how many properties you are renting. According to Martin Dasko’s blog a t www.moneycrashers.com , it might be between $80 and $100 per month for a condo. Remember, too, that an older property is likely to need more attention than a newer one that still has active warranties. Be sure to evaluate the fee in the context of all your other expenses: for example, consider the mortgage payment, utility and maintenance fees, and property taxes. The Do-It-Yourself Approach You want to screen potential tenants yourself? It’s not that hard to do. Use the following steps: 1. Come up with an application for tenants, and have each potential tenant fill it out completely. Real estate associations have them, there’s a Microsoft Office template you could use, or you could find something online. Two websites to check are www.tenantdata.com a n d www.on-site.com . What do you want to see on the application? a. An employment record. Job stability is good. Is this someone who has moved around several times in the last few years, or is this someone who has been in the same job for a while? b. Can the potential tenant afford the unit based on current income level? c. Does the potential tenant have enough debt to make rent payments a problem?

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