It doesn’t matter if you’ve owned rental properties in Portland Oregon for years, or are just getting started, tenant screening is the “key to success” with finding the most qualified tenant.
What exactly is tenant screening? It’s taking the time to fully investigate each tenant including their income, FICO score and employment history just so you will be able to have confidence that they can afford to pay the rent on time each month.
When you screen a tenant, you literally have the ability to know everything there is to know about a potential tenant and save yourself the time, money and hassle of renting to someone who could potentially turn out to be a “nightmare” of a tenant.
Follow the Same Tenant Screening Procedure with Every Tenant
One important thing to remember when screening tenants is that you want to follow the same screening process with each tenant. Don’t cut corners or give a tenant second chances if they don’t meet all of the qualifications that you’re searching for during your screening process.
During the process of considering someone to live in one of your investment properties you should establish guidelines for renters including the following:
- They must have a healthy credit history.
- Their background check should be clean.
- Ideally, a prospective tenant should have a clean eviction history.
- Stable Employment History is a must.
- They should earn sufficient income, ideally 3 times the rent.
- Most important, they should also have positive landlord and employer reference checks.
In this day and age, it’s important to take potential tenants through the same screening process each time and provide an application to each potential applicant, especially since you don’t want to be accused of a Fair Housing Discrimination.
Today’s Know Their Rights or Where to Learn About Their Rights Online
Thanks to the Internet, many renters in today’s world are “savvy” at knowing their rights as renters so you should go out of your way at explaining your screening process to each renter just so they don’t think that you’re making it up as you go along.
To ensure that there aren’t any questions from potential tenants regarding your screening process you should add your screening criteria in your rental advertisement, website, and also on the application itself so that they know exactly what you are looking for in a tenant before they apply.
Should You Count Out A Tenant Based on Their Rental History?
In the past, we’ve seen many landlords establish requirements for what they are looking for in terms of rental history. This is both good and bad because even though having a specific Portland rental history is good, you may end up eliminating people who would potentially be good tenants but don’t have the rental history that you’re looking for.
Our Portland Oregon Rental company has seen many good people over the years be unable to qualify for rentals due to poor rental history. These people were often homeowners who had never rented before or technology workers who just came to the United States and didn’t have any rental history in this country.
Besides carefully screening a Portland Oregon renter, use your better judgment when considering them based on their rental history because you don’t want to count out someone who could be a good fit for your rental property.
When we have encountered tenants over the years who have poor rental history, I’ve placed greater importance on a tenant’s rental history including their FICO score and job references. Why? Thanks to mobile phones, it’s easy for someone to ask their friend or family member to “play the part” of a former landlord and confirm a potentially fake rental reference.
As we mentioned already, a tenant’s past performance is a good indicator of what you can potentially expect from them in the future.
Besides watching out for tenants who have a poor rental history, you should also be on the lookout for someone who changes jobs every few months and has moved often. You don’t want to make the mistake of renting to someone who only rents from you for three months before they leave in the middle of their lease unless travel is a part of their job.
While you are interviewing a tenant, you should look for tenants who take “ownership” of their history and aren’t going to offer you an excuse or story for why their lives turned out as they did.
Someone who has a story for things like multiple moves or job changes over a period of years is an individual you may want to be wary about unless their FICO score shows that they are reliable and can be depended on to pay their bills.
What Type of Credit Are You Looking For On An Application?
Although the words “good credit” is often used in the rental industry when screening potential tenants, this is a very broad description that can be misleading.
To specify the type of credit that you’re looking for, you should indicate the following:
- They must not have had any late payments in the past 90 days.
- No items in collections other than medical bills.
- No bankruptcy within the last 7 years
An individual’s FICO or credit score is a good indicator of if someone can be considered to be reliable because if they pay their mobile phone or other bills late, this is a good chance that they may be inclined to pay you late as well.
Make Sure They Meet Your Income Requirement
As we mentioned above, our company looks for tenants who earn 3 times the amount of the rent but for some landlords, they may ask for 2 ½ times the rent. This is an important requirement to meet because you want to have confidence that your tenant will be able to pay their rent each month.
At some point, you may encounter a renter who is self-employed. In these cases, you should ask them to provide a copy of their previous year’s tax returns because this is an indicator of what they may be currently earning when you screen them.
Always verify a potential tenants income level. To do this you can contact the center’s current employer that’s listed on their paycheck stubs to verify that they are currently employed. Keep in mind that the employer won’t tell you how much they are currently earning but if you have their current paycheck stubs it’s not going to be hard to confirm how much they earn on a monthly basis with their current employer.
Get Property Management in Portland Oregon
Managing your own rental properties can take a lot of time, money and effort. Hiring a property manage can save you time and enable you to do more during your day including growing your portfolio of investment properties.
For property management in Portland Oregon contact Rent Portland Homes today by calling (503) 515-3170 or click here.