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Today’s “Ask the Expert” column features Silvia Englert, General Manager with Tenant Screening.

Q: What steps should property managers take to find the perfect tenant for their rental property?

A: One of the hardest jobs associated with being a landlord or property manager is finding that perfect tenant who will pay the rent on time and take care of the property as if it’s their own. Here are some tips to make the process more successful.

Set standards that every prospective tenant must meet to be qualified.
Creating a set of standards that all applicants must meet to be considered for a particular rental unit is extremely important. Each rental unit should have its own standards, dependent on the quality and location of the rental. Standards can include a minimum verifiable income-to-rent ratio, a minimum credit score, a history clear of evictions, a pet policy, and so on. As long as those standards stay within the bounds of all fair housing laws and are applied consistently, you as a property manager get to determine what those criteria are.

Conduct a phone interview with every prospective tenant.
Talk to every interested candidate on the phone and let them know what the rent and deposit amounts are before showing them the property. A short phone interview can quickly eliminate tenants that are not serious and/or not qualified.

Asking the right questions is also important. Examples include: What kind of pet(s) do you have? When do you want to move? Why are you moving? Be sure to take notes and listen for inconsistencies.

Then fill out a pre-qualification form for all potential tenants that are still interested, review the information and invite applicants that pre-qualify to come and view the property.

Show the rental property and ask prospects to fill out a tenant application.
Meet every applicant in person no matter how perfect they sound. Are they on time? Do you like them? Do they seem interested in the property? Do they “fit” the neighborhood? Do you feel they’re being honest?

If everything seems right and the potential tenant is still interested, hand them an application and ask them to fill it out right then and there.

Personal information, current and last two landlords, current and last two employers and monthly income should all be part of the application, as well as an authorization to do a complete background screening.

Review the applications and run a background screening on qualified prospects.
When reviewing applications, make sure you comply with federal laws (Fair Housing Act and Fair Credit Reporting Act) as well as any local ordinances that apply.

Read all rental apps carefully and compare them with your notes and standards. Background screenings should include previous addresses, national criminal and sex offender search, national eviction search and a credit history. Evictions, bankruptcies, poor payment history, a low credit score and a low income-to-rent ratio can all be signs that an applicant might not pay their rent on time.

Check references.
Last but not least, check employment and landlord references listed in the rental application. Sometimes tenants will give fake references and list a friend as a previous landlord or employer. When talking to their current landlord, beware that they might not be truthful, as they may be trying to get rid of a difficult tenant.

For verification of income, request that the tenant provide you with a copy of their most recent paystub(s) or last year’s W-2. You should also call the employer to get more insight. Many companies have rules and regulations on what information they’re able to disclose about their employees, so questions that require a yes or no answer may garner better results.

Select your perfect tenant.
After reviewing all the information and comparing it with the standards you set, you can now make your decision. Hopefully you’ve found the perfect tenant and the applicant can sign the lease, agree to all the rules and regulations, and pay the deposit and first month’s rent.

Congratulations on finding the perfect tenant!

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