Proper tenant screening is one of the most vital things you can do as a landlord. Finding great tenants can seem challenging, but without thorough tenant screening, it’ll be even harder to accurately decipher if an applicant will make a good tenant.
Best property management software helps you find all the information you’ll need about prospective tenants. You can use this information to decide whether someone meets your standards.
With that said, here are five characteristics that an ideal tenant will possess.
1. Income of at least three times the price of rent
One of the key pieces of information you’ll need from your applicants is proof of income. A tenant should have a steady source of income. That way, you can rest assured that they’ll be able to make their rent payments on time.
An income of at least three times the price of your rent is generally a good rule of thumb to follow. A tenant who meets this threshold is in a good position to consistently have all the money they’ll need to cover rent payments and all their other financial responsibilities.
If you accept a tenant with an income that’s too low, you may end up dealing with late or incomplete payments, late fees, and possible eviction.
2. No prior evictions
As part of your tenant screening, you need to perform an eviction report. While this information is no longer included on credit checks, you can access eviction histories through third-party providers.
A prospective tenant with no prior evictions is a good sign. No landlord wants to deal with an eviction. It’ll cost you a lot of time and money, and the process can be rather stressful. While this isn’t always the case, tenants who have been evicted one or more times are more likely to be problematic for you than tenants who have a clean eviction history.
3. Great credit history
Credit reports give you a holistic understanding of an applicant’s financial responsibility. While a credit score can be a helpful tool in knowing where someone stands with their overall credit, it’s not the only thing you should look at when considering an applicant. Tradeline summaries, fraud indicators, and basic inquiries will give you more in-depth information that’ll be helpful to you.
As a landlord, credit reports are crucial in determining whether a tenant will reliably pay rent in full and on time. If an applicant’s credit history shows that they regularly make late payments, you won’t be able to rely on them to pay your rent on time. If an applicant’s credit history shows that they have multiple debts, this may indicate that they aren’t very financially responsible.
4. A history of renting long-term
An ideal tenant prefers to stay in a lease for a longer period of time. Not only is this an indication of loyalty, but a tenant who’s likely to renew a lease is great for minimizing tenant turnaround. The more often you run into vacancies, the more time and money you’ll spend looking for a new tenant while receiving no rent payments. For this reason, tenants who tend to bounce around frequently are less desirable than ones who are likely to stick with you for a while.
5. Positive references
Current or previous landlords can be some of the best sources to learn about a renter. They’ll be able to give you a practical rundown on what kind of tenant this person is. If a landlord has nothing but positive things to say about a renter, then that’s a good sign.
Good references can confirm if a tenant consistently pays rent on time and is respectful to neighbors and property. While you shouldn’t exclusively use references when making your decision, they can definitely help get a more personal feel for someone’s tendencies as a renter.
Although looking for great tenants can seem like an overwhelming task. You can use property management software to help you acquire all the information you’ll need. Using these guidelines for what makes a good tenant, you’ll be more equipped to decide whether a tenant is qualified for your lease.