Finding the best tenant for your rental property requires the collection of data. It also requires a strategic interpretation of that data. At North San Diego Property Management, we manage multifamily and commercial properties in the North County area, including in Oceanside, Carlsbad, Vista, San Marcos, and Solana Beach. We know how to properly screen tenants, and today we’re sharing some tips on how to find and place a well-qualified renter in your investment property.
How to Screen Tenants: Background and Credit Checks
A full background and credit check is required when you’re screening prospective tenants. You’re looking for a clear criminal history and an indication that the applicant is responsible with money. Perfect credit is going to be hard to find, but you may want to establish a baseline for the credit scores you’ll accept. We like to see 680 and higher for our properties, however we consider lower scores if references are strong, income is higher and they’re willing to pay a higher security deposit. It’s also a good idea to check evictions or judgments for money owed to previous landlords and property management companies.
Tenant Screening: Employment and Rental History
It’s important to verify employment and income. You want to be sure your tenants earn enough to pay the rent every month. We like to see gross income (pre-tax) that is 2.5 to 3 times more than rent. Ask for documentation, such as pay stubs. If your applicant is self-employed or a contract worker, you can look at bank statements or tax forms. Speak to current and former landlords. This will give you the best picture of your potential tenant’s rental history. You can ask those landlords if the tenant paid rent on time, left any damage behind at the property, and gave proper notice before moving out. You’ll want to know if there were any problems, and if they’d rent to that same tenant again. Also, it’s important that you follow up with all of the references. One can actually get a pretty decent impression of a person after talking to their employer, landlord, and friends (uh references).
Choosing a Well-Qualified Tenant
Establish some rental criteria so you can approve or deny applications based on the information you receive. At North San Diego Property Management, we pick the best two or three applicants based on the background check, credit check, and landlord references. Then, we dig a little deeper with our calls. Most owners prefer to leave the screening to us, however we’re always willing to involve them. Our eviction rate for properties we own and manage is far lower than average precisely because we spend so much time on the screening process. Average eviction rate is 2.3 per 100 units.
We would be happy to help you find a great tenant. If you have any questions about our tenant screening process, please don’t hesitate to contact us at North San Diego Property Management.