Screening applicants to make sure they are qualified to rent your property is an essential process of being a landlord. I have spoken with many owners who don’t go through a detailed screening process. Some only call the current landlord, some will only run a local criminal history, and some only have applications filled out and none of the information is verified. If you don’t know who you are renting to, how do you know that person will take care of your property? How do you know if they can pay the rent? Having rental property for many landlords is an additional source of income. So why do so many owners treat their rental properties as a charity?
Let’s go through some basic things a landlord should be doing in a screening process.
Tenant Criteria:
First and most important, you should have a Tenant Criteria form that all applicants read and sign at the time of making application. This form tells each applicant what you are looking for in a qualified tenant. Some things would be:
- How much income is needed and that it needs to be verifiable
- What their rental verification should or should not show
- No eviction filings in the past (how many) years
- How you will handle felony convictions (You must be mindful of the HUD Guidance concerning renting properties to persons with felony convictions released in 2016)
- Any other specific requirements you place for your rental property
Once you have a Tenant Criteria form put together and you use it consistently, this could help to reduce the chance of any discrimination accusations.
Application:
Your next step is the application. You want to make sure all applicants sign it and that there is verbiage that allows you to pull their credit report. If you make an approval or denial based on their credit score, it’s important to remember to abide by The Dodd-Frank Act. At Anchor RE & PM, we look at their entire credit history. The history gives you a better look into how they handle their debts. Unfortunately life happens, and by reviewing the history it gives you an idea of how they handle things when life does happen. (i.e. Divorce, bankruptcy, job loss, etc)
Criminal History:
The next thing you look at is their criminal history. At Anchor RE & PM we use a system that checks for:
- National & local criminal history
- Sexual offender check
- FBI Most Wanted
- Federal terrorists watch list
- Social security number check
- Eviction search
The rental property is in Florida and many times you will have applicants that are moving here from another state, so local checks won’t do any good in these circumstances.
Rental Verification:
The rental verification should be done to make sure the applicants maintain the properties they have lived in. Some questions you could ask are:
- Ever had late payments?
- If so, how many?
-Ever had any lease violations?
- How many people live(d) there?
- Did/will they get their security deposit back?
- Would you rent to them again?
Be aware that people can now ‘buy’ a landlord reference online. Yes, I said ‘Buy a landlord reference’. Should you suspect this has happened, contact your Florida Real Estate Attorney for guidance on how to handle.
Employment Verification:
You should also make sure the applicant can pay the rent each month. You can accept pay stubs, but those can be altered on a computer. It is wise to also call the employer and verify the information you are given.
While this sounds like a lot of extra work on an application process, to have a qualified tenant renting your property is more than worth it. At Anchor RE & PM, we have a 2 day deadline to complete the process. If we run into a road block on getting call backs for the rental or employment verifications, we give it back to the applicant to handle. If they really want to live in your property, they will light the fires needed in order to assist in getting their application approved.
I hope this helps you with your application process.
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Happy Landlord-ing!
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