Landlords – have you ever had to evict a tenant or deal with a problem tenant that doesn’t follow the rules? Do you have tenants that are consistently late in paying rent or only make partial payments? Although not uncommon, these concerns CAN be avoided.

Follow These Steps and Best Practices to Attract Qualified Tenants:

1) Prescreen: Consistently showing your home or apartment to prospective tenants can be VERY time consuming. Starting with an automated and thorough screening process will filter out prospects who do not meet your minimum requirements. This should be done BEFORE you spend time on the phone or in person showing the property. We suggest using an online showing system requiring prospects to answer several prescreening questions prior to being able to schedule an appointment to view the property! Here are a few questions to consider:

• Why are you moving?

• What’s your earliest possible move-in date?

• Are you seeking subsidized housing?

• How many bedrooms are you looking for?

• What is your verifiable monthly income?

• Do you have any felonies? If so, please provide the date and details

• Have you been evicted in the past 5 years?

• Have you filed for bankruptcy in the past 7 years?

• If you like the property are you able to submit a rental application and consent to a credit and background check?

Several software options out there have features to automatically decline a prospect from scheduling a showing depending on their answers! For example if they answer ‘YES’ to an eviction in the past 5 years, they will not be able to proceed with scheduling a showing. This feature alone can save you a lot of time, money and headaches dealing with unqualified applicants.

2) The Showing: Once your prospect has passed your prescreening questions it’s time to show them the property and meet them face to face. Rentalutions.com recently posted a great article on some best practices when showing a unit to a prospective tenant, here are a few takeaways to ensure the showing goes well:

• Get there early and prep the home, both inside and out, pickup any trash or debris outside, turn on the lights inside and ensure the property is in good showing condition. The right tenants will be judging your property as much as you are judging them!

• Have a 1 page summary printed out highlighting the details of the property including size, bed bath count, amenities and at least 1 photo, don’t forget your contact info! Prospective tenants often look at many rental options and may not recall the details of all the places they see. Providing a 1 page summary may be the reason they choose your unit over another.

Red flags to watch out for:

• Did they show up on time? If they were late did they notify you ahead of time?

• Who are you meeting, are they the same people who scheduled the showing?

• Did they wipe their feet before entering the unit?

• If the unit is a non-smoking unit, do they smell like smoke?

• Are they criticizing the property and already complaining about many items?

• Are they in a big rush and need to move ASAP? This may be an indicator that they are going through an eviction, make sure you speak to their landlord!

Look at their car to see how well maintained and clean it is! Is it very old and showing signs of significant deferred maintenance? Getting a new car can be expensive and may hinder their ability to pay rent in the future.

3) Application Screening: Once you have received an application it is time to analyze it, here are a few tips on what to look for:

• Residence history: be sure to get 3-5 years history and contact current and previous landlords to ask about their experience with the tenants, would they rent to them again? Look for stability, does the prospect move every year or do they have a long stable residence history at only 1-2 previous address’s?

• Income requirement: a good guideline is to require at least 3x the monthly rent in income. For a $1,000/mth unit you’ll want at least $3,000/mth in income. Get recent pay stubs to verify income!

• Credit report: a low credit score may not automatically mean the prospect is unqualified. Look at the detail, are student loans or medical bills a factor affecting them negatively? If so perhaps an increased security deposit and co-signer may offset the risk of a low credit score. Or perhaps the prospect is heavily in debt with many judgements against them, this could become a problem tenant causing you to fight to collect rent each month.

• Background check: you want to pay close attention here and look out for illegal activity, violence, sex offenders, felonies and evictions. You may want to consider automatically declining prospects with this type of negative history and background.

4) Denying An Applicant: Fair Housing Laws state you cannot reject tenants based on a protected class like gender, age, race, ethnicity, etc. You can reject tenants based on their credit report and criminal history or any other reason that’s not part of a protected class. Also beware of your state laws, you may be required to send an adverse action letter to applicants who do not qualify based on credit and background.

5) Accepting An Applicant – Set Expectations: Now that you’ve found a highly qualified tenant you want to set expectations to ensure a sounds relationship going forward. Your lease will be the main tool to set these expectations. Be sure the tenants understand when rent is due, how to pay it, what happens if it is late, how to submit a maintenance request, what to do in case of emergency, how to care for the property and what is required of them to get their security deposit refunded.

It is strongly recommended that you have a separate addendum in your lease outlining the rules of the property. The list of rules may include quiet hours, routine maintenance required of the tenants, what repairs are their responsibility for example: garbage disposal clogs, replacing light bulbs and furnace filter replacement etc.

There are many helpful websites and resources to assist in avoiding problem tenants and evictions and it all begins with the selection process. For those self-managers out there looking for more, we suggest reading Jeffrey Taylor’s “The Landlord’s Survival Guide”.

To your success!

Mark Khuri