September 20, 2014
The Tenant Screening Process is one of those things that everyone does their own way, some feel it’s more of an instinctual screening process, meaning you have a one on one meeting and you have a gut feeling that the person is going to be right or not, some go for the paperwork and make a logical assumption as to the quality of the tenant and their reliability.
Whatever the processes might be, there are a few things that you need to ascertain in the interview before you sign an agreement with your tenant.
Can they pay the rent?
Have they been regular with their payments in the past at their previous residence?
Have they had a good referral from their previous landlord?
These three simple questions will have you well on your way to a decision about whether your tenant can be a good potential tenant for your rental property.
Affordability.
When dealing with banks to purchase property, the banks usually allow housing payment to be adjusted to around 40 of DTI (Debt to income) ratio. The same holds true when putting properties on rental and is a sound method to screen out potential Applicants for Tenancy.
Make sure to include a space for Current Income in the tenancy application form. Calculate if the RTI (rent to income) ratio is around 40% if that is the case consider the applicant qualified for an interview otherwise reject the applicants outright.
A detailed screening process would ask for proof of income in attachment along with the application, such a screening process would help get you track your potential tenancy applicants better.
Past Records
Set up the interviews with the screened applicants that met the affordability criteria; make sure you ask them to bring proof of their past records to submit in the interview.
Have a conversation with the applicant and get to know them and their nature ask for their previous records; review all the documentation thoroughly, also remember to ask for references as well as testimonials or a contact number from the previous landlord to attest their good relationship with their previous landlord.
Make sure to go into background checks for all applicants. Ask the following questions tactfully.
Do they have a criminal History or a history of drug abuse?
Do they have a severe illness?
Do they run a business out of the home?
Do they Plan to Practice with a Band in their Home? (It Happens)
Do they have any pets? (Have a strict no pets rule)
Once all the basic questions have been covered, make sure you go with your gut, it’s important that you feel comfortable with your tenant from the get go, as you will be seeing a lot of them after they become a part of your project, it’s good to accept applications from tenants you become comfortable with in the interview process, it goes a long way in helping to maintaining a good relationship .