Investing in real estate rentals can be a dependable source of monthly income. You found a great property you can afford in a good location in Lexington that is desirable to tenants. You’ve made any property improvements that were necessary, and perhaps you updated the kitchen and bathroom. Now, it’s time to find a tenant. Here is how to properly screen tenants in Lexington
Start your hunt for tenants by posting your property and have candidates fill out applications. Ask for a list of their current and previous jobs and income level. Verify this income with pay stubs or other financial statements. Your application should also include previous landlord contact information, previous rent amount, and their address so you can follow up later. You will also want to ask if they have any gaps in rental history and why. Ask how many people are planning to live in the house and if they have any pets. You will also need to ask for personal references. If the candidates are not willing to provide some of this information, it may be a red flag.
First of all, you will want to verify their current employment. You need to make sure they will have a reliable income so they will be able to make their rent payment. Then, you will want to call their personal references to get an idea of the kind of person they are, which will further cement their ability to make rent payments. If everything checks out so far, the next reference you should contact is their previous landlord to check out their feelings on the tenant and if they were able to make their rent regularly and on time. Some questions to ask the previous landlord include:
- Does the tenant have current debt with you?
- Does the tenant have a history of on-time payments?
- Has the tenant caused any damage to the property?
- Did the tenant disrupt the neighbors or cause any issues?
- Did the tenant receive their security deposit when they moved out?
- Would you rent to this tenant again?
You will want to run a credit check on your promising candidates. This will show you how they handle their payments in general by identifying if they have any late or missed payments, or if they generally pay all of their bills on time. It will also show you their current debt level and whether they will be able to pay the rent you are asking.
You will also want to run a background check. Make sure the service you use provides rental history to find any evictions, criminal records, and public records for any unreported judgments or other outstanding debt. This will also shed some light on the type of person they are.
Hold interviews with your promising candidates. You want to make sure their lifestyle and habits fit the intended use of your property. You may want to ask about the following items:
- Do you have any pets? How old are your pets? Are they housebroken?
- Do you plan on getting a roommate in the future?
- What is your typical workday like? Do you work night shifts or odd hours?
- Do you smoke? Do you smoke indoors or outside?
- Do you have any friends or relatives who frequently spend the night in your home?
You don’t have to become a private eye every time you receive an application. When you screen tenants, you just want to have a good snapshot of who the tenant is and make sure they will be able to pay their rent. Be careful not to cross the line, make sure you follow the landlord-tenant laws of Lexington and do not break any privacy laws. Make sure the tenant you select will be willing to treat your property with respect and follow any guidelines of living in your property.