After a successful marketing campaign for your Ohio real estate investment, you may have gathered a promising group of potential tenant candidates. The next thing you have to do when renting out a house is start the tenant screening process. You need to filter through the best type of renters to ensure that you get a steady income and that your residential investment continues to be well-maintained. Here is a guide to help landlords perform thorough tenant screening services that protect their investments and ensure long-term tenancies.
Signs of Top-Quality Tenants
To have a successful tenant screening, you need to learn how to identify the best residents who will be ideal occupants of your Cincinnati properties. Some of the characteristics you should be looking out for in prospective tenants include:
- The ability to pay the rent on time.
- A steady source of income.
- A good rental history and made timely regular payments.
- A clean criminal history.
- A clean eviction history.
- A responsible attitude.
The Tenant Screening Process
To have an effective tenant screening procedure, you first need to be aware of what qualifications prospective renters must meet. Knowing the qualities you are seeking makes it easy to determine what type of tenant you are looking for. Create a list of tenant criteria and design a suitable tenant screening process that aligns with your goal of picking the right tenants for your Cincinnati home.
Perform a Pre-Screening
It will be time-saving for self-managing landlords to do an initial pre-screening rather than launching a tenant candidate into an intensive screening process. If your initial pre-screening shows that a potential tenant isn’t a match, then you can save valuable time instead of going through the length of a full tenant screening.
If, for instance, your Cincinnati unit cannot accommodate pets, then listing this in your ad eliminates prospective renters with pets. Specify details in your listing, and when you receive inquiries over the phone, it is best to be straightforward and inform tenant candidates about your requirements.
Pre-screening prospective tenants helps you separate the renters who will be a good fit for your investment from those who won’t be. Unqualified candidates can also abandon their application when the tenant screening is very detailed. This can help you shift your focus to the serious and responsible tenant candidates who have the qualifications you set.
Review a Rental Application
When preparing a rental application, you must get comprehensive information from prospective tenants. This includes their:
- Contact information.
- Current residential address.
- Current landlord’s name with contact information.
- Former rental history with details on former landlords’ names and contact information.
- Current and previous employers’ information.
- Job title, salary, and period of employment, including contact references.
- Authorization for credit and background checks.
Learning how much the applicant makes is important so you can assess if it is enough to meet the monthly rent. Some landlords require tenants to have a monthly income that is triple the rent price. Landlords can, however, use their discretion when assessing an applicant’s eligibility. For instance, if they don’t make 3X the monthly rent, but have a good credit score and rental history, they may still make for a good tenant.
Procedure for Verifying a Tenant’s Income and Employment
It is vital to verify the employment history of a potential tenant. Learning if the tenant candidate offered correct income information is critical since this is the main source of paying the monthly rent payments. That’s why, residential landlords should not skip this crucial step.
Questions You Should Ask Current and Previous Landlords
Although it’s seen as an additional task to reach out to previous landlords of a prospective tenant, this is a necessary step if you want to gain a full picture of a candidate. Former landlords can provide you with more detail about the prospective tenant’s behavior during their previous tenancies.
Check Tenant Credit Reports and Handle Background Checks
Generally, credit and background checks can reveal renters’:
- Complete account history.
- Credit score.
- Prior evictions.
- Relevant criminal records.
With good credit scores, landlords can trust that renters have healthy finances and can meet the monthly rent payments. Scores that start at 680 or higher are considered satisfactory. Still, it is best to take a holistic view and assess all details provided by applicants. Look for a sense of responsible spending, timely payments, low debt, and consistent income. A landlord wants to land the most financially stable and responsible prospective tenant as this helps reduce the risk of late rent payments and other issues during a tenancy.
Approve or Deny a Potential Tenant
Upon completing the steps above, it is time to decide to approve the rental application for your Cincinnati homes. Landlords can call or email candidates who passed the tenant screening and inform them of the lease signing process. For rejected candidates, landlords can email them about their decision and keep a copy for documentation. It is not necessary to list the reasons why the rental application was declined.
Review the Fair Housing Act to ensure you are not discriminating against a qualified applicant based on their protected classes. Protected classes under federal and local fair housing laws include family status, national origin, race, sex, color, disability, and religion. By adhering to federal fair housing laws, you can ensure a fair and legally compliant rental application process.
Bottom Line
As a landlord, tenant screening is critical to managing your Cincinnati rental. Good renters can help you maximize your return on investment. Suppose the prospect of self-management is daunting. In that case, you can partner with a trusted management company like Equity Team to perform tenant screening services and other vital management services on your behalf. Contact our property management company today for more information on our professional services!
