How to Select A Property Management Company – Tenant Screening
When thinking about putting a home into rental service with a property management company, there are several things you will want to consider before you sign a contract with a property management company.
What are their guidelines for accepting a tenant? Are you comfortable with those guidelines? If not, find a property manager who you are more comfortable with.
The guidelines should address the following:
Credit – While most tenants have fair to bad credit, the property manager should evaluate the applicants’ credit to see what areas are delinquent. For example, if an applicant has a lot of medical debt, but paid all their other bills timely, that should be a consideration. If however, they are constantly late paying the basic living expenses, this should be a concern.
Criminal Background – In today’s world, a landlord is responsible for the occupants of the home. It is very important to screen tenants for violent crimes and previous drug arrests. While DUI’s and misdemeanors may be overlooked – crimes against people and drug related crimes should be carefully screened. Length of time since conviction and severity should be reviewed as this history follows them throughout their lives even after they have changed their lifestyle. Who hasn’t made a mistake in their youth?
Previous Rental History – Has the applicant been a good caretaker of other landlord’s property? It is very important to review rental history back several years in order to get an accurate picture of the prospective tenant. Some property managers only get a reference for the last year of residency. What if they was an issue and the landlord wants to get rid of the tenant – do you think that they would be honest with you if they are trying to get rid of them? Probably not. Therefore, if you go back several years, you will normally get a better picture. The property manager should look at several factors – number of late rents, bad checks, neighbor complaints, any damages to the property, proper notice provided, and if the landlord would rent to them again. One thing that you should also review is that the person verifying the information is the manager or owner of the home. Creative tenants provide false names to provide rental history, so if you don’t check carefully, you can get a false report.
In addition, you will want to check the county records to see if there has been a dispossessory action filed against the prospective tenants.
Proper screening is so important. A tenant that is not properly screen will cost you a lot more in damages, evictions, and lost rental payments.
If you have a property in Gwinnett, Cobb, North Fulton, or Forsyth counties, please consider Solid Source Property Management.
March 10th, 2009 at 4:09 pm
Good article. As a landlord or property manager, you must be sure to treat all applicants the same so you don’t run afoul of fair housing/discrimination laws. Consistent screening is key. The best screening companies I’ve used are http://www.e-renter.com and http://www.zipreports.com.
M Leek
March 10th, 2009 at 8:40 pm
Matthew – you are absolutely right! At SSPM, we use National Tenant Network to provide the reports for accuracy and consistency. Then I personally review each applicant file to make sure that we are selecting the best tenant to meet the objectives of the owner. Thanks for reading! Anne
March 18th, 2009 at 1:15 pm
Great info, I couldnt agree more about the importance of proper screening.
February 14th, 2010 at 11:34 am
I agree with stiff screening. In Colorado a “misdemeanor” can carry up to a year in jail. We don’t allow anyone with misdemeanors or a DUI. In fact, if someone has too many minor traffic tickets or has been arrested more than once, but no convictions, we see that as either being defiant or just having too many run-ins with the law. Residents with good credit and clean backgrounds are good neighbors and are good for your properties.