Secrets to Screening Tenants Like a Pro
Over the past several years, I've built and managed a sizeable property portfolio. Throughout this journey, I've learned a lot about the importance of screening tenants effectively. Today, I'll be sharing the main qualifications we use in Houston to reduce our eviction rates to less than 1 percent.
Why Tenant Screening is Essential
Tenant screening is a fundamental step in property management. It helps to prevent potential issues and ensures long-term success for both landlords and tenants. Our screening process, a dynamic and evolving standard, is tailored to fit our current needs. Though strategies may change, the lessons learned are invaluable and might be useful for you, whether you're screening tenants yourself or evaluating your property manager's qualifications.
Our Core Qualifications
1. Income Requirement
One of the foundational qualifications we use is the income-to-rent ratio. We require that tenants make three times the monthly rent. For example, if the rent is $3,000, the gross income needed is $9,000. This threshold ensures that tenants can manage their living expenses while keeping rent affordable.
2. Rental History
Three years of rental history is another crucial qualification. Whether a tenant is new to renting or has owned property in the past, this history tells us a lot about their reliability. We focus particularly on reaching out to former landlords rather than current ones to obtain honest feedback.
3. Past Evictions and Broken Leases
We're firm on having no evictions or broken leases within the past seven years. However, we understand that people grow and change, so this timeframe accommodates those who may have had issues in their younger years.
4. Criminal Background Check
Safety is a priority, so we conduct checks for violent crimes within the past 10 years. While we believe in second chances, the safety of our tenants and neighbors is paramount. Crimes involving violence are reviewed carefully, especially in multi-family units.
5. Credit Risk Assessment
Rather than a minimum credit score requirement, we implement a credit risk fee. This approach allows us to differentiate between applicants based on various financial behaviors without strictly limiting eligibility based on credit scores alone.
Conclusion
These qualifications provide a framework that maintains our communities' safety and the integrity of our properties. While not groundbreaking, these practices are tried and true, somewhat akin to fundamental workouts like bench presses or squats. It's not just about rules; it's about adapting and refining as necessary.
For those interested in more detailed, regularly updated guidelines, check out Emerson Property Management's qualifications. Remember, these are starting points. Adapt them to suit your needs and always be willing to adjust based on feedback and outcomes.
Final Thoughts
I hope you find this guide useful in shaping your tenant screening process. Whether you manage your properties directly or work with agents, having a robust screening strategy is essential.
