When the housing market crashed a few years ago, some home owners mortgages were more than the equity they had and unable to sell their homes. Some owners decided to rent their homes rather than walk away and not be eligible to get a mortgage for 3 or so years.
Looking for a tenant in a rental situation can be a bit overwhelming and costly if you are not prepared to take the proper steps to ensure that the person moving into your home is the right and responsible person or family.
No matter whom this potential tenants is, a family member or friend, ALWAYS have them fill out an application. The rental application is a VERY important step to starting a tenant profile and it would be highly recommended that a few dollars be spent to obtain a good rental application rather than making one up that you think will get you the information you need. A good rental application can be obtained at most office supplies stores, possibly a local real estate investing association or if you know of someone that has been in the rental business for some time, they may be willing to give you a copy of the application form they use.
What is Important on the Application
~ Income. This should be the first thing you look at to ensure that the potential renter can even afford to be a candidate in your search. If they do not make enough money to pay the rent on time monthly, why pursue this application further.
~ Employment History. You will want to be sure that your potential tenant is employed. If they are not employed, how will they be able to not only pay the rent on time, but also the monthly utilities if they will be responsible for these payments. As a landlord, be sure you understand that some of the house utility bills stay with the address and if they tenant bails, you will be responsible for that bill in the end.
~ Pets and Roommates. Although it is hard to monitor once a tenant moves in, whom the tenant opens the rental property up to as roommates can be difficult to monitor. Be sure you understand and have a serious conversation s to whom will be living in the home and using that address as a primary one. Most landlords require anyone over 18 that will be staying in the home to fill out an application. If they have pets, you may want to set a weight/number limit as a protection to your investment. You can add clauses for dollar amounts and such if one does not already exist in the application you are using.
~ Personal Information. Be sure to get as much detailed information on their background and be sure to run a credit check. You will also want to explore the reason as to why they are leaving their current rental situation. Ask for names and contact numbers to speak with past landlords.
~ Personal References. Ask for personal references to learn about their character and back ground.
You will want to scrub the tenant’s credit report to see if there is a trend of late payments, collections, bankruptcy or other red flag issues.
A really good landlord will take a few hours out of their day to visit a potential tenant at their current home unannounced just to see them in real life action. You will be able to see how well they have maintained the home, if there are animals are they cleaning up after them and just to have the chance to talk with them a little more to make sure you are making the right decision. Ask them to sign one last form that will help you to make a final decision.
For more tenant screening tips, you may find helpful hints at ultimate tenant screening guide.