Finding a tenant is easy. Finding the right tenant? Not so much.
Even if you're managing a hot property with a long waiting list, taking your time thoroughly vetting prospective tenants ultimately pays off. Avoid problem tenants that can cost you time, money and a whole lot of frustration by carefully assessing if your prospective tenant is a good fit for your property.
Here are a few simple questions that can reveal a lot about your prospective tenant:
1. Have you ever been evicted?
If the answer to this is yes, proceed with caution. It doesn’t necessarily mean that they still have the same tendency. If a tenant has been evicted very recently, it is likely that they will be evicted again. If the eviction was at least a year ago or more, ask the tenant to explain the situation and how things have changed for them financially.
If the previous eviction is not a deal breaker for you, consider it a red flag and do your due diligence — screen thoroughly before accepting a prospective tenant with previous eviction history into your property.
2. What are your reasons for moving?
This question is not only a good conversation starter but can be very revealing. Find out what prompted your prospective tenant to move and make sure there are no red flags in their answer. Reasons like “I need a bigger space” or “I’ve always wanted to live in this neighborhood” are good signs, and reasons like “I was evicted” or “I had disagreements with my landlord” are definitely cause for worry.
3. What’s your monthly income?
According to industry standards, a tenant should have a monthly income that’s approximately two-and-a-half to three times the cost of the rent. Finding out if your prospective tenant’s salary lives up to what they are about to spend on rent is arguably the most important piece of information you should screen for.
4. Do you agree to undergo a background and credit check?
It’s pretty kosher to conduct background and credit check before renting out property and they should be a part of your policy if they aren’t already. If your prospective tenant is alarmed by your request, ask them to move on. This doesn’t necessarily mean that they have something to hide but it hinders you from screening them properly.
Not every prospect with poor credit score necessarily make problem tenants, and similarly, not everyone who has an awesome score is automatically better. You can uncover so much more about your prospect by pairing this information with our next question below.
5. Are you able to give me references from an employer, as well as a former landlord?
Asking for references adds more context to your prospective tenant’s ability to pay the rent and if he/she adheres to the terms of lease agreements. Employment references help determine if the tenant has active income and that it is viable. Asking references from prior landlords and current landlords can help you assess whether or not your prospective tenant is dependable.
6. Do you own pets or are planning to own any?
Whether or not you allow pets in your rental property, your prospective tenant should be transparent with you on this. If they do have pets or are intending to have pets, make sure they are clear about your property’s pet policies as well as additional rental fees or deposits that may be necessary according to your lease terms.
7. When are you planning to move in?
This, of course, is an essential piece of information. Apart from figuring out if you available unit or the property the prospective tenant is interested in will be ready at their desired date, you can also go over initial rent payment policies such as deposits, pro-rated payments, etc.
8. Are you able to pay the first month’s rent and full security deposit on or before your move-in day?
Let your prospective tenant know what payments are needed before they can move in. If you require an FLS payment (first month, last month, security deposit), make sure that your tenant can pay the entire amount prior to moving in. If they are uncomfortable with these initial payments or are having issues paying, it may be an early indication of their future inability to pay rent.
Taking the time and due diligence to screen your prospective tenant properly can save you a ton of headache and lost rental income down the road. While it’s important to be clear and assertive when vetting prospective tenants, you should also strive to be fair. Asking these questions is just the first step.
Be sure to acquire the documents you need to make a good judgment such as your prospective tenant’s pay stubs, credit reports, and references. At the end of the day, your rental property is a business you should protect.