As a landlord, renting out your property is a risky proposition. The tenant needs a steady job, good credit, and no evictions. It takes time to collect the information for the management company. But what if you could make things easier and simpler? Read on to find out five (5) things to consider before accepting a tenant’s application:
1st Consideration Before Accepting Tenants:
Check Their Credit Scores
When accepting applications for tenants, always check their credit scores. An easy way of doing this is to use a lending API program, which checks data such as:
- The applicant’s credit scores from the three major credit bureaus (Transunion, Equifax, & Experian)
- The likelihood of a person defaulting on a loan
- Income verification, including self-employment verification
- Asset verification
2nd Consideration Before Accepting Tenants: Check Their Moving History
There are services available that will verify the applicant’s address history. When using such an applicant address verification service, if you find that an applicant has:
- a series of moves within a short timeframe
- addresses they don’t disclose
- “missing” addresses
it’s a good idea to reject them, as renting to them may be risky. One of the reasons the applicant may be moving so much is that they don’t know how to handle their money appropriately.
3rd Consideration Before Accepting Tenants: Know The Laws
Before opening the doors to tenants, it’s your responsibility as a landlord to know the applicable tenant / landlord laws.
Antidiscrimination laws prohibit discrimination based on the following characteristics:
- Race, national origin, or ethnicity
- Familial status
- Some areas also protect those within the LGBTQ community as well.
There are also laws regarding the right to reside in a livable space, deposits, and privacy. A high-level examination of such laws may be found here.
4th Consideration Before Accepting Tenants: Get References
A vital part of being a responsible landlord is getting tenant references and checking them. Check as many categories as possible: family, friends, former landlords, or employers. If you can’t get ahold of someone on your list promptly or the person you get ahold of gives vague, unsatisfying answers, it might be best to reject the tenant.
5th Consideration Before Accepting Tenants:
Check Out Your Property
The other tips on this list examined the tenants, but this one looks at the property itself. Do a walkthrough of the property. Check the following items/ issues.
- Examine all windows. Make sure they open and close smoothly, as well as being able to lock. While checking them, also look for proper caulking, ensure there are no drafts, and they are of a reasonable “R” value.
- Have an expert look at the roof. Tell the expert to check for leaks, and make appropriate repairs. Some products on the market will help extend the single’s life if you don’t want to have it torn off and replaced. While you’re at it, have them examine the gutters. Damaged gutters can cause ‘ice dams’ that will cause major headaches and expenses to fix come winter.
- Check out the property’s grounds. Are there any tripping hazards? Do motion detector lights need to be installed? How is building security; does it need to be improved? If grass, trees, and flower beds are on the property, does the property need a landscaping company? In the winter, will it need a snow removal company or someone to scatter salt to prevent falls?
- Check the building’s plumbing and HVAC system. Do the toilets flush properly? How’s the water pressure in the showers? How well does the heater and air conditioning system work? If there’s a building-wide water heater, how well does it keep up with demand? Might it be better to replace it with individual HWOD (Hot Water on Demand) units? If the building has a built-in sprinkler system, is it operational?
- Determine if you need to contract with a waste disposal company or if the tenants will be able to make do with garbage cans and recycling bins provided by the city.
- Check each of the unit’s electrical systems. Plug in the typical things you expect in each room to see if they can run without trouble; if they can, you’re good to go. Another thing you may wish to determine is if there are enough outlets available and if they are appropriately located.
- Have an exterminator come through the building to check for rodents, roaches, and bedbugs, getting rid of them as necessary.
- Determine if you need to use street parking or if you’ll need to arrange for a separate parking area.
Once you’ve examined the property, you need to determine the fair market value for your listing. Among the variables to consider are:
- The number of bedrooms and bathrooms in the apartment; the more of both, the higher the rental should go.
- Neighborhood, including what amenities are nearby; the more stores, restaurants, movie theaters, doctor’s offices, etc., the higher it should rent.
- How nice the space is. The more recent the place has been remodeled, the more expensive the finishes, and the better working everything is, the higher the rent should be.