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11 Steps Landlords Should Take When Evaluating New Tenants

As a landlord or property manager, you need to make sure your properties have good, reliable tenants who will not cause problems and will pay their rent on time. Even if you’re tempted to fill vacancies as quickly as possible, you need to think about exactly who you are renting to and what the consequences might be.

Failing to properly vet your new tenants could lead to disaster. There could be late rent payments or even damage to your property. Be judicial in your approach to finding and evaluating new tenants, as this could save you many headaches down the road.

Eleven members of Forbes Real Estate Council share some of the smart, legal steps that landlords/property managers need to take to carefully evaluate all potential tenants. Here’s what they recommend:

1. Have A Clear Protocol

The first thing you should do is have a system and follow it at all times. Deviation is the devil here. If everyone does it the same on the intake, hopefully results will be satisfactory. If you don’t feel you need this, OK. But you do need it. Look for some property management software and try it out. You may learn something your (fill in the blank) never told you. – Michael J. Polk, Polk Properties / Matrix Properties

2. Take Previous Landlord Reference Seriously

A previous landlord reference is a very important piece of reviewing any potential tenant’s application. Here are some of the questions I ask: Can you recommend this tenant without reservation, has the tenant had any issues with any neighbors, how long have they been your tenant, were you able to return the tenant’s security deposit or did you need to hold anything back for repairs? – Deborah Rabbino Bhatt, Vesta New York

3. Assess Pattern Of Behavior

On the application, ask for the last three places they’ve lived with contact information for the landlord. Ask the tenant, “When I call your past landlords, what will they say about you?” Then, actually call these landlords and hear how the tenant was. This is important because bad tenants don’t always have evictions or bad credit that show up on reports. But they do have a pattern of behavior. – Jeremy Brandt,

4. Scrutinize Their History Against Written Criteria

The criteria for residency should actually be posted and available in the leasing office. A complete application should be obtained on all persons over the age of 18. A credit report, criminal background and verification through the registered sex offender database should be obtained so that the complete picture can be evaluated. Employment and rental history should be verified, as well. – Caroline Kane, CKR Property Management, LLC

5. Hold In-Person Interviews

Credit score alone is no longer the reliable indicator it once was. Many people can lose their jobs with a perfect credit score, so it is really important to interview potential tenants, look them in the eye and call on their references. You can tell a lot by the tone of their references. Ask directly if the person is a good tenant who meets their obligations. This is the art of the business. – Eddie Lorin, Impact Housing REIT and Strategic Realty Holdings

6. Have A Bulletproof Lease Agreement

The smartest step is to have a bulletproof lease agreement that is constantly tweaked to your changing needs as a landlord or property manager. Another tip, ask a veteran company for a copy of their lease to tweak to your liking and business model. Also, having good legal counsel that can help you at any given moment is great. – Engelo Rumora, List’n Sell Realty

7. Check Social Media

Landlords should always use a third party background and credit checking service. They should never skimp on checking references. Just like when you apply for a job and HR takes time to Google the potential new hire, we always Google our prospective tenants. You don’t have to agree with their lifestyle, but it’s a good idea to see what they post publicly. – Tanya Delahoz, Dwell Summit

8. Make Sure To Screen All Applicants

When you have co-applicants interested in your property, like a couple or roommates, it can be tempting to only screen one of them. But, tenant screening best practices dictate that you should screen all applicants over the age of 18. Each renter has a unique past — credit and background history can vary widely between co-applicants, so get a full picture and screen each person applying. – Sarnen Steinbarth

9. Think Like A Detective

A credit check is a must to ensure the tenant has a good record of payments and is, therefore, likely to pay rent on time. Criminal background checks are also crucial to make sure the tenant has no history of crime, particularly with manufacturing or selling drugs. Properties that have previously been involved in drug manufacturing depreciate in value and can make it hard to rent again. – Chris Ryan,BEYOND Properties Group

10. Review Compliance To Housing Laws

Smart, savvy landlords ensure they review compliance to Fair Housing laws in combination with state or local regulations. A critical component to screening is maintaining a consistent process for all. Creating written guidelines and scorecards enable stricter guidelines and transparency. Having documentation in the event of a question by an applicant or an audit can save you unnecessary fines. – Linda Liberatore, Secure Pay One – My Landlord Helper

11. Use A Third-Party Service

We rely on a third-party company that not only pulls credit, evictions, and background, but also call the previous landlord. You can do this on your own, but relying on a professional third party can cut liability and give you a consistent process. We also always meet prospective tenants in person, many times at their current residence. We rely less on the credit score and more on the personal touch and stable job. -Noel Christopher, Renters Warehouse


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