The purpose of tenant screening is to know who you’re renting to. This is the first and most important step to minimize risk when you have a rental property. We are joined by Jim Henderson of Landlord Solutions, which is a tenant verification service that helps us screen here at Miller Laine. These are five tips that will protect your property and help you find the best possible tenant.
Screen Your TenantAlways screen your prospective tenants well. You want to make sure the tenants can pay rent, and you want to know they have a record of being good tenants in the past.
Instant Screening and Online VerificationYou can get an online background check on several different websites. But, be careful. An online company you don’t have a relationship with will collect a minimal charge, but you aren’t getting any guarantees about the type of information you’re getting. The tenant screening report may be incomplete and it may not give you the information you need to make a correct and legal decision. Conduct an in depth tenant background check.
Legal ComplianceYour screening process must be compliant with all federal, state, and local laws. There is specific information you are legally permitted to use when you’re making a housing decision. Just this year, in 2017, Seattle has three new ordinances regarding this, and there will be two more enacted before the end of the year.
Debt to Income RatioMany management companies simply multiply income to determine if a tenant will qualify. We use a debt to income ratio. In order to have all the debt you need to do a credit check for renters. This will outline what the revolving credit payments are and what their debt service is. You can verify income and see a dashboard where everything is presented. This helps you make a final decision. At Miller Laine, we look for a debt to income ratio that is less than 45 percent.
Show the PropertyDon’t rent to tenants who have not seen the property. There are laws in Seattle and outwards called first in line laws. The first tenant who applies needs to be screened first, and if the minimum criteria is met, you have to approve their application. When someone is first in line to apply and they don’t see the house until after they are approved, they could change their mind, and then you lose precious time on the market.
These are five tenant screening tips, and we have more information we’d be happy to share. If you have any tenant screening questions or you need help with Edmonds property management, please contact us at Miller Laine Property Management.