With this article, I will teach you how to screen tenants for a rental property. People often look for that one thing that is the key…that if you did this right, you’d have it made.
Getting a good tenant who is going to take care of your property, pay the rent, and not be a constant pain is one of the most critical jobs for OKC property management companies. I’m going to share with you three ways my property management company will screen Oklahoma City tenants.
The more better screening is done the better we become in minimizing vacancy rates for rental properties
If your OKC property manager does that part right, it will save you a ton of grief. If it doesn’t do that, they and you will be in for some expensive lessons.
Once you have a prospective tenant raise their hand and say, “I want to rent this property” you need to have an application you can get into their hands. Our rental application focuses mostly on three things: rental history, their monthly income, and their court records.
Some OKC property management companies rely strongly on a credit report because it is a strong indicator of how they pay their bills (or not). We will sometimes pull a credit report on more expensive rentals ($1,00 per month+). On lower-end rentals, it tends to lose it utility. However, it doesn’t necessarily show how they will pay their rent. Some people will slow pay or no pay on just about anything other than their rent.
Here Is How to Screen Tenants: The Best Potential Tenants Screening Process for Rental Property
1) What Is at Least the Last 12-months of Rental History? Gives You Trust Towards Tenants
We are most interested in the most current year, and possibly the last five years of rental history. We need to have a complete history (i.e., continuous) for the last year. We don’t want to see any evictions in the last five years. If We find them, we will require first and last month’s rent, in addition, to possibly a higher security deposit. We want to be convinced we’re actually talking to their landlord when we call their reference. But we don’t stop there when we screen Oklahoma City tenants…
2) How Much Is the Income Versus the Rental Amount: Reveals Tenants Paying Ability
We need to see a job history for the last year. When did they start their job? Longer is better; if they just started their job in the last month, we’re not too impressed (unless they are moving in from out of state). Pay stubs are usually a requirement so I can verify their numbers. We also want to call their personnel office just to verify what they are saying is actually the truth. Our company policy is that their take-home pay needs to be at least three times the monthly rent (unless they are receiving rental assistance). If it’s less that’s too tight for most households.
3) What Does a Search of Court Records Reveal: Know the Social Status of Potential Renters
We always check their name and social security number against the Oklahoma Supreme Court system on-line database. I’m looking at what their situation has been for the last five years or so. Any evictions should show up. You’ll also see minor offenses like speeding. Red flags for us are evictions, drug convictions, or other felony offenses in the last five years. If they’ve had a felony that was 10 years ago but nothing since We will take that into consideration.
4) What About the Credit Check? Another Crucial Factor of Tenant Screening
Credit can be an excellent last step in the approval process. It provides a meaningful score as to the applicants’ willingness and ability to pay bills. It also shows a long track record of financial behavior, both good and bad.
One of the other benefits is that it can provide confirmation as to where a prospective tenant claims to have been living. Or, it can prove they did not live where they say they had been living.
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