Having or building a property is usually the first step taken in becoming a landlord and the hassles involved with getting your own property typically has to do with funding the project. As difficult as building your own property can be, a more complex decision arises after the completion of the building and this has to deal with finding the perfect tenant to lease the property to. Due to the economic situation, most landlords are in a hustle to get tenants for their buildings so they rent their properties out without conducting any prior check or screening on the prospective client. Later, many come to regret their hasty decisions. This article is geared towards the importance of conducting a tenant screening exercise before letting out your property.
Governing Reasons to Conduct a Tenant Screening Exercise
Conducting a tenant selection exercise should not be overlooked for it helps a landlord forestall future problems as well as safeguard the property. Below are the major reasons for conducting a screening.
• Your Reputation: The reputation of your property directly affects your reputation as a landlord and if your property is known to encourage disruptive, noisy and troublesome tenants, a bad reputation is inevitable. A landlord with a bad reputation gotten from his property cannot reliably attract good tenants year in year out for tenants also carry out their research on properties before applying for a lease. Therefore, conducting a screening for potential tenants that includes reports from their previous landlords can help you circumvent this problem.
• Safety of your Property: The proviso in which a property is left after a lease is not determined by the landlord but the tenant it was leased to. Therefore renting your property to disparaging individuals would do no favors to you for its renovation or the measures that would be taken to get the tenant to repair the damages. This sooner or later would cost you funds that could be used elsewhere. We all know a person’s destroying capacity cannot be measured by looking at individuals, so properly investigating the past behavioral patterns of a prospective tenant and his/her credit checks to judge their ability to pay for damages is highly recommended.
• Looking Out for your Existing Residents: Ensuring the peace and comfort of your already peaceable residents is also very important for a continued peaceful co-existence would encourage good clients to maintain their rents. Bringing in a new tenant that can potentially disrupt the peace of an environment can spell doom for a landlord because this acts as an incentive to push already paying and peaceful tenants away. Instead of trying to activate damage control procedures you could avoid these in the first place by conducting the essential tests.
• Tenant’s Ability to Pay: For most landlords, a tenant’s ability to pay his or her rent is the most important criteria for the individual getting the lease. Conducting a complete screening exercise on the prospective client’s employment status, landlord credit check reports and past payment history is very significant in determining the tenant’s financial capacity. The ideal tenant is one whose monthly salary is much more than the rent to be paid. Therefore if this is your main criteria, avoiding unemployed persons or sales men who live under commissions should be the way to go.
• Protecting Your Investment: Some tenants are known for destroying properties and running away without covering damages and in extreme cases outstanding rents show up. To avoid falling into this situation a full tenant selection is recommended for all prospective tenants. Details such as a valid identification means, employment slip, credit checks, a recommendation from a previous landlord etc should be asked for before opening your property to anyone. These simple precautions would help you avoid the thousands of dollars you might have to spend trying to legally get the tenant held accountable for the damages he/she did.
• Property Policies: All landlords have their rules and regulations concerning the use of their properties and the state also provide laws guiding the number of individuals that can cohabit in a defined space. Therefore finding out the number of occupants that would be moving in is suggested. Asking potential customers about their pets if any is also important for this can serve as a criteria for either admitting a tenant or not.
Source : investinternals