The best way to ensure that you rent to quality tenants is to screen them properly. For property owner's and property managers this can often become costly. There is usually a charge related to running a credit and criminal background, so property owners and managers usually charge an application fee. This application fee can cover your costs and in some cases, allow tenants to screen themselves; tenants who know they will fail the background check often won't be willing to apply at all. It is wise to run an application on each person over 18 years of age. In dealing with students most companies also process a parental guarantor form and charge a fee for that as well.
Diligence in your tenant screening process will save lots of time and money. You can eliminate applicants who have a history of broken contracts, evictions, poor payment history or even a criminal history. Often times, the prospective tenant will not take time to apply or pay the fees when they know they can't pass one or more of the criteria, thus saving you time and money.
Property owner's and managers should develop some form of leasing criteria that all applicants have to meet. This is normally based on credit worthiness, rental history, employment history, criminal background check, eviction history. I recommend having the prospective resident sign the criteria showing that you have informed them of the requirements at the time of accepting the application and application fee. If you are charging an application fee, you must follow the laws in your state and charge the same amount for every prospective tenant. Make sure you've chosen a set amount for your application fees and state that figure to everyone who applies. This will help you avoid breaking any Fair Housing Laws.
If you are going to charge a rental application procession fee, be sure to follow the laws in your state.
Consistency is key in this business.
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