Searching for a new tenant can be a stressful experience. You may get a lot of applicants, but choosing the right person isn’t always easy. You’ll want to conduct a thorough approval process—from the application to the lease signing—in order to find the right tenant.
Read on for a four step guide every landlord should follow before approving any new tenant.
1. Create a Detailed Application
The rental application is the first step in vetting a new potential tenant. An application can cover a lot of bases, so you’ll want to make sure it’s as detailed as possible. Some important questions to ask on a rental application include:
- Annual income and employer
- Previous residence and landlord’s contact information
- Roommates and guarantors (if any)
- Social Security number
- Whether or not they have pets
If you have any other specific needs from a tenant, the application is the place to ask these questions. Once you’ve received their application, you’ll be able to verify employment, ask their previous landlord any questions, and determine if this tenant is a good fit for your property. Explore the convenience of utilizing a tenant referencing platform in this digital age.
2. Run a Background Check
A background check is an important step in approving a new tenant for several reasons.
First, a tenant background check will allow you to verify their credit score. A credit score is a good indicator of how fiscally responsible the potential tenant is. If you’re trying to determine whether the applicant is going to be reliable with rent, you’ll want a tenant with a credit score of at least 650.
Second, running a background check can determine if your potential tenant has a criminal record. This is not typically a question asked on rental applications, so it’s important to make sure you’re not renting to someone who could pose a threat to you, your property, or your other tenants.
Lastly, a background check is going to verify the tenant’s personal information listed on the application. You don’t want to discover you’ve rented to someone who has lied about who they are. In order to prevent legal troubles, you’ll want to run a background check to ensure the applicant is being honest with you.
3. Request a Refundable Deposit
In order to keep a rental property off the market, a potential tenant will need to put down a deposit. This step will prove whether or not the applicant is serious about renting the space, and ensure they have the funds to pay for the move-in costs and monthly rent.
In the event that you do not approve the potential tenant’s application, the deposit should be refundable. This money is specifically meant to work as a placeholder, and keep other renters at bay while their application is being considered.
This deposit can also be used toward the move-in costs and security deposit, if and when the tenant is approved.
4. Explain Property Rules
Some rental properties have certain rules tenants need to follow. It’s important to explain these restrictions thoroughly to any applicants, prior to lease signing. Going over these rules will ensure your property is the right home for a new tenant, or point out any deal breakers that will require you to continue your search.
Some important restrictions to note before approving a new tenant may include:
- Quiet Hours – Some rental properties have set quiet hours at night. This means parties, blasting music, and other high-volume activities are prohibited after a certain time. It’s vital that you’re upfront about quiet hours prior to approval in order to ensure you’re getting a tenant who respects and appreciates these restrictions.
- Decorating – Most landlords set limitations on making decorative changes to the property. Whether it’spainting the walls, mounting televisions, or installing large art pieces that may damage the walls, you’ll want to make these regulations known before it’s too late.
- Rent Control – Depending on where you live, your state may have laws in place regarding rent control. If there is potential for rent to be increased should a tenant choose to renew their lease, it’s vital that you make this clear prior to signing. You want to build a relationship with your tenant based on trust, and being transparent about changes in rent is an important step in gaining this trust.
- Pets – Some apartments strictly prohibit pets, while others have restrictions on breeds. If your rental property has any nuances regarding our furry family members, make sure you’re clear about this prior to accepting a new tenant. You don’t want to be vague about allowing small dogs, only to find your new tenant has an army of Great Danes.
Find the Tenant That’s Right for You
Don’t make the mistake of approving a new tenant too hastily. Signing a lease is a big commitment, and you want to be sure the person moving in for the next year is going to respect your property.
Conducting a thorough background check, asking the right questions, and making sure the rules of the property are understood are all vital steps you must take before approving a new tenant. It’s important to be thorough but fair during this process. Don’t be afraid to ask the hard questions, and try your best to get to know the person you’re about to rent to.