Taking the time to screen potential tenants properly can help minimize risk and lead to a better long-term tenancy. Everyone knows the basics- you need to check credit, income and history. Here are a few helpful tips that you may not have considered:
1. List your qualifications in writing, either in your online ad, on your application, or both. Having the qualifications in writing minimizes conflict, helps the unqualified applicants "weed themselves out", and also limits liability as you have the written proof to fall back on if someone claims you declined their application based on some discriminatory statute, rather than the simple written facts.
2. Charge an application fee payable by secure funds. No personal checks or credit cards. Unqualified applicants often write bad checks (no mystery there), and credit card users will occasionally dispute the credit card charge if they are declined for the property. A secure payment conveys genuine interest in the property.
3. Application fees are regulated, so keep the fee reasonable ($25-30 is typical) and charge the same fee to EVERYONE. Charging a different fee in different situations (married vs. single, older vs. younger, family vs. roommates) leaves you open for a Fair Housing complaint, which can result in some hefty fines along with a civil suit.
4. Know who you are dealing with by getting a copy of their photo I.D. (Drivers License, Military, etc.), but collect this verification AFTER you have approved their application, NOT before. This will limit your liability if a declined applicant states your decision was based on information gathered from their I.D. (Age, Race, National Origin, etc.)
5. Never take the information at face value. When verifying employment, do not ask for the name of the supervisor given on the applicant. Instead, ask for human resources, or ask to speak to "a supervisor" that can verify employment (V.O.E.). Written format is preferable, so a faxed V.O.E. is always better than a simple phone call.
6. When verifying history, make sure all addresses that appear on the credit report are verified. We look for at least 2 years of verifiable history, but do not accept sublet history, so ask the right questions and do not be afraid to ask for further documentation (copy of their former lease, etc.).
Investors Choice Property Management is a Sacramento and Roseville based management company currently managing 100 single-family units. We are happy to share our ideas with Landlords and Agents alike, so your questions or comments are always welcome.
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