Screening tenants for your other house in your homestead is crucial for the safety of your homestead. As a prepper who has been renting out homes for long, you already know how essential screening is. It’s the first line of defense when getting a tenant who will be paying on time and one who will have little problems in your homestead. Homesteaders have devised ways of getting tenants that sometimes don’t work. However, if you follow this step by step guide, you will have a better success rate.
My neighbor has been having problems getting good tenants for the other house. The ones he has are noisy, lack regard for other tenants, and some don’t pay on time. He requested me to help him find ways he can change the situation, and below are some of the ways that have been working for me.
How do you screen a potential tenant? You screen a prospective tenant by running credit and background checks to find out if they can afford to pay rent and if they are criminals. You can then interview them to find more about them and the reasons why they want to become your tenant. From there, you can contact the tenant’s previous landlord and their employer to confirm the interview information. In most cases, the landlord and employer will give accurate information on the potential client, especially if they parted amicably.
Notify the Potential Tenants of Your Intention to Run A Back Ground Check
You need to notify a potential renter of your intention to run a background check before you can interview them. If they are not willing to have their background checked, discontinue the whole process. However, if they agree, you can move on to the next step of the screening process.
The best way to screen potential tenants is by using social media. You will see if they like to hold parties in their houses from their Facebook and Instagram accounts.
If you can do it yourself, you can use tenant screening tools. They will offer you detailed screening information and will handle or the research and legal implications as a result of the search.
Run a Credit Check
As a landlord, you must do your due diligence on the potential tenant to make sure they will afford to pay their rent regularly. You can do that by requesting their credit score report. A credit report will show you all the potential tenants’ loan repayments like a car loan, mortgage, medical bills, and student bills if they are any.
The credit score report also shows the number of credit cards the potential tenant has in their possession. If the prospective tenant has many credit cards and all of them are maxed out, that’s a red flag. The prospective tenant may be having bad spending habits, which could potentially affect their ability to pay their rent monthly. You can only find out about that folly from the credit score report.
Always approach the issue of negative credit score on a case by case basis. A potential tenant may be having a bad credit rating, but it could be due to some reasons they had no control over. It’s therefore essential to probe further to know the reasons for the negative score to understand the potential tenant better.
What are some exemptions from bad credit score you might consider? Although having a bad credit score shows they are bad at managing their payments and debts, you might consider them if they were caused by the below:
- overlook over closure that was several years ago
- divorces- they are messy and could end up spoiling a credit score
However, if the potential tenant had a bad credit score that was not emergencies related, that’s a red flag that maybe a disaster in waiting.
Having a Lot of Unreported Income in the Bank Statement
Always ask for a three-month bank statement from your potential tenants. It will guide you on the income flow for the client as well as identifying the source of income for the tenant. You will also know their income and expenditure. With the information from the report, you can conclude if they can afford to pay their rent on time. A sketchy inflow to the account that is not regular no matter the size of the money is a red flag that should put you on alert as to their ability to pay their rent on time.
Other potential clients don’t report their income to IRS to evade tax. That is a red flag, and it is not advisable to work with such a person. The revenues could also be precedes from crime or money laundering. So don’t trend in the unreported income waters.
If there is an irregular income, albeit of large some, you need to know how they will pay you on time. Enquire what will happen if that income doesn’t come how they will raise their rent? Those are some of the red flags for unreported irregular incomes.
You can probe them by asking why they are depositing it in small amounts in the account and if the income source can be traced. The potential client could be involved in an illegal business like drug dealing, and that could be the reason they are not reporting their income to the IRS.
Why would a tenant prefer to pay you to rent on cash?
A tenant may prefer to pay on cash as someone could be after their money. As a result, they may opt to have just had enough in the bank and the rest in cash. Therefore in case, a court order freezes his accounts, only a small amount will be frozen in the bank. They will continue living comfortably.
When the Tenant Wants To Move In ASAP
If a tenant tells you they want to move in immediately, you should be alarmed as there is usually a story behind the hurried moving. Maybe they are being kicked out of their current house due to lack of payment. They could also be involved in criminal activity, and that is why they may be fleeing from their current residence. Get to know the motivation behind the person wanting to move immediately. Also, verify the reasons they give you from their previous landlord.
Research on both the tenant and the previous owner to make sure the information provided is authentic. Ensure that the potential tenant gives you the landlord information though sometimes people decline giving landlord information. Tenants refuse to give landlord information siting that the landlord doesn’t know that they are moving or they are not in speaking terms.
Some potential tenants may put the correct landlords’ name but instead use a friend’s mobile number so that when you call to interview them, you find the friend who will give you the wrong information. Nowadays, everything is in the public domain. Therefore you can quickly get you can verify the owner of the phone number provided by googling it or searching it on Facebook. If it shows different people, that is a red flag. If a person gives you the wrong information, it raises question marks about their integrity and trustworthiness, disqualifying them I the process.
Tenants Who Show Up Late On the Interview
If you schedule an interview with a potential tenant and they call in late or cancel and give flimsy excuses, that’s a red flag. You don’t know how they will treat to paying to ret too. You should avoid such tenants as they may tend to pay rent late also.
Such tenants give all manner of excuses when the rent due date arrives, and they could become problematic. You are better off not taking them as tenants in the first instance rather than dealing with evicting them later.
Trust Your Intuition
Your intuition will not lie to you, and if your guts tell you that the potential tenant is not the right person, let the house stay in your home, its best it remains vacant. The eviction process is cumbersome and expensive, so if there are some indicators that the tenant may be problematic in the future, you are better off without them. You will know during the interview process if the tenant is the right one or not depending on the red flags or inconclusive information they give you during the process.
Request Three Rent Installments In Advance
Requesting three rent instalments in advance may price your property out of reach to many. However, the ones that your get might prove ab bargain in the long run as you will attract serious tenants who can afford to pay rent comfortably.
If you maintain your stance, you will notice that your houses will be drawing a particular class of clientele who are easy to deal with and compliant to the set rules.
Credit Score Should Be 720 And Above
A potential tenant with a score of 720 and above is somebody responsible for their money. They would never jeopardize that score by not paying their rent on time. If they meet other criteria, then they would make excellent tenants in terms of money discipline.
Verify Income from the Employer
You need to contact the potential tenant’s current employer to verify whether they gave you the correct employer details. You will also verify the income range from the employer. If everything checks out, you can use other parameters to decide whether to take the tenant.
Speak With the Last Landlord
Landlords are always looking out for each other and will give you all information, like how long the potential tenant stayed in the house, their rent payment habit, their behavior towards other tenants, etc. How big is the home, how many bedrooms, this not only verifies the information about the owner to know who the landlord is
Having a tenant is a long term relationship that needs s you to be with. If they give you the best information and it verifies, it will go a long way in giving you the best information.
Benefits of holding an interview for screening tenants
- It separates the weed from the chaff
- You get the best client tailor-made for your property
- You don’t run the risk of having a client who dont pay rent on time
Other Related Questions
What Questions Should A Landlord Ask A Potential Client?
Landlords ask the below questions when interviewing a potential tenant. They include:
- Do you own a home or are you renting currently?
- If you are currently rent, how long have you lived in that house?
- Do you have a family, or will you be living alone?
- When do you intend to move in?
- What is your profession?
- Roughly, how much do you make?
- Do you have a pet?
How do I pass a rental application check even if I have bad credit?
A rental application can be grueling, especially if you have bad credit records. However, you can change that by being thorough and organized adequately before going for the interview. You should have all the required documents in place, and with the right attitude, the landlord may be on your side.
Offer to pay several months’ rent as a way of showing commitment and goodwill to the landlord. You also need to secure a guarantor in case you have a bad credit record. A guarantor vouches for you and may be called upon to clear rent arrears in case you are unable to pay up.
What does a rental background consist of?
Landlords run a potential client’s background check to find out if they have previous criminal records. The searches could also reveal whether they are trouble makers who have been evicted from their past houses. A background check will also show if the person is employed and what they do for a living. The landlords can use the information to determine if the potential client can afford to pay rent and also co-exist peacefully with other tenants.
How do I find a perfect tenant?
There is no perfect tenant, as you will realize over time. However, here are some excellent tenants, and while it may be hard to find, they are not entirely unicorns. Below are some criteria that you could use to land a perfect tent:
- Get referrals from your good tenants and real estate agents. Most likely, they have fronds or know people who fit your profile.
- Set and standard and follow it strictly when interviewing for tenants
- Trust your intuition and gut feeling
- Always request for a deposit
- Always be within the set laws