3 Application Screening Mistakes to Avoid as a Landlord
One way to increase your resident retention rate is to ensure the tenants you are moving into your property are likely to stay. Tenants who have a solid history of meeting their obligations should be your target. The screening process gives you an opportunity to learn enough about a potential tenant to determine if he or she fits your criteria. To increase the chances of landing good tenants, avoid these screening mistakes.
Skipping the Screening
It can sometimes be tempting to skip the screening process on an applicant. When you are in a hurry to fill a vacancy or you have a good feeling, screening can seem like an unnecessary step. However, it is important that you screen every potential applicant. Even friends and family need to be vetted.
A screening will give you access to the real story behind a tenant's application. You can find out about his or her rental history, civil court history, and criminal history. All of this information gives you a better idea about what type of tenant he or she will be, which is far more accurate than a gut feeling.
Incorrectly Assessing the Applicant's Income
Some landlords look for an applicant to have two or three times the rent in monthly income. Although this might seem like a guaranteed way to ensure the tenant has the funds available to pay rent on time, there is a possibility that you are overlooking some crucial information about the applicant's income.
Even though an applicant has the income required, there are other obligations that can interfere with his or her ability to make payments on time. For instance, if an application has to pay a significant amount of spousal and child support each month, his or her monthly income might make it difficult to make rent payments.
Failing to Update Application
It might be tempting to download and print an application that you find online and use it to screen tenants, but it might not be thorough enough to collect the information needed to properly screen residents. Not all online applications fit every situation and you want to make sure the application you use is right for your property.
You also need to avoid using the same application year after year. You need to ensure your application reflects current rental standards. A good way to do this is to review your application each year and update it as needed.
Screening is far more challenging than some landlords realize. To ensure you are not making costly mistakes, contract with residential property management services.