Screening Prospective Tenants For Your Rental Property
Back in the day, you could put up a “For Rent” sign in the window or front yard of the property and get a decent tenant in no time. Or there would be advertisements in the newspaper. However, with the times changing and people not as trustworthy, real estate investors now have to use modern technology and other tools to screen for potential renters.
Along with the screening come legal issues that you as a real estate investor need to know about upfront before you start the process. That would include:
• How the screening is done
• Housing laws (both state and federal)
• Advertising without deception
It’s a good idea to read up on the policies and procedures regarding this. Knowing the information beforehand can save you from potential litigation and shelling out thousands of dollars. If you are still not sure, hire an attorney that specializes in this area.
When a real estate investor or landlord wants to screen potential tenants, some of the things they should know about include:
• Employment
• Current income
• Credit history
• Previous rental history (including any evictions)
The prospective tenant needs to fill out an application. The application should be completed in full. Anything that does not apply to them should be marked with a dash or N/A (not applicable). Go over the application to make sure it is correctly filled out. Ask the applicant to provide you with character references that can be checked.
Ask for a photo ID to make sure that the person is who they say they are. The ID, such as a driver’s license, should be valid. Copy the driver’s license number on the application.
Let the prospective tenant know that you will have a background check as well as a credit check done. This can help you to weed out any potential problem renters. They will have to provide their consent for the credit check.
Set up a time to meet with your prospective tenants in person. In the world of modern technology, face-to-face meetings can get pushed to the back burner. However, meeting them in person can show you their personality and if they are someone you would want to rent your property to.
On the application, have a code of conduct that they are to adhere by should you allow them to rent from you. The code of conduct will also include what is expected of you and what is expected of the tenant. Make sure it is explained in a manner where they can understand it. If you’re not sure about the wording, seek counsel from a real estate attorney that specializes in this.
One of the most important things that you must do is to follow the policies and procedures of the Fair Housing Act, or FHA. This helps to keep you in line as well as protect prospective tenants from being discriminated due to race, religion, gender, disability, sexual orientation, etc.
Read over the policies carefully. You may have to read them several times to make sure you understand and avoid unnecessary litigation. You must work to avoid the appearance of being biased in any way, shape, form or fashion
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