Are you a landlord in Grand Rapids Michigan looking to do tenant screening on prospective residents? Compass Property Management would like to help you with some basic tips to guide you in choosing a great tenant for your rental property.
Verify employment history
When doing Tenant Screening you should verify a prospective resident’s employment. Compass Property Management recommends that all landlords set up a detailed screening policy and adhere to it. In your policy you should define what you consider to be adequate employment history. You will want to verify how long your potential lease holders have held their current job. Some landlords require 6, 12, and even 24 months of steady verifiable employment.
Verify gross household income
Part of a thorough tenant screening is making sure your potential residents can afford the home or apartment they are looking to lease. There are many ways to determine adequate household income – usually landlords use a ratio of income vs rent. For example, you may require the gross household income to be a minimum of 3 times the rent. Once you have made a decision how you will income screen your potential residents add the criteria to your screening policy and apply it to every prospective resident equally.
A housing choice voucher (HCV) does income qualify but you must do further verification
A successful tenant screening goes beyond simply verifying employment and income. In cases where a prospective resident is coming to you with a housing choice voucher, also known as a HCV, you still have work to do. Being a successful landlord is more than making sure you get paid. As with all prospective residents, regardless of their source of income, you must still review applications with an eye to how they will care for your rental by reviewing rental history. A successful landlord will also complete a background check on all applications, regardless of how they will pay the rent.
Verify rental history
As part of a complete tenant screening policy, you should set rental history standards for your applicants. You may choose to require a minimum history as a leaseholder. This could be as short a 1 year. The longer the history the higher the likelihood of having a successful tenancy. However, the stricter your policy the harder it will be for you to find qualified residents. If an applicant does not have a sufficient rental history, you may accept a cosigner to guarantee the financial obligations of the lease. The applicant’s housing references must be verifiable; family members and friends should not be considered acceptable references.
Look at Criminal History
Criminal History of all occupants is a big part of a successful tenant screening. There are many ways to define what is and what is not an acceptable criminal history. What is key is that you clearly state in your screening policy what your standards are and then apply your standards equally to all applicants. Examples of defining what is an acceptable history are “no felony conviction within the last 5 yrs / not more that 1 in a lifetime”. You may say “no violent felonies”. There are endless options how you can screen for criminal history. Write a policy and stick to it.
Professional Leasing and Property Management Services
It is our experience that tenant screening is the area where most private landlords feel the least confident in their own skills. Properly vetting applicants is the foundation of a profitable lease. Poor tenant screening upfront often leads to damages in excess of security deposit, lost rent and even eviction costs. At Compass Property Management we offer multiple levels of service, each brings with it our years of experience in completing a rental background check. Are you simply looking for help filling a vacancy? Then our Placement Services are for you. Are you looking for a break from day-to-day toils of being a landlord? Then our Personalized Management Service is right up your alley.
If you decide you want to keep doing the showings and running your own applications, that’s great. The Rental Property Owners Association is a great resource for private landlords looking for training and advice.