The ultimate goal is to maximize the rental income. This will only be possible if you rent to the right tenant. The right tenant will, among other things, care for your rental property, report maintenance issues, stay long-term, and pay rent on time.
There are many steps involved in landing your ideal tenant. That’s why this article, will share a quick guide to effective tenant screening in Pittsburgh.
Know What You’re Looking For
First, have a clear idea of what qualities you’re looking for in a tenant. The right tenants will have a stable employment history, good rental history, zero relevant criminal conviction, and are respectful and reliable.
Once you know what you’re looking for, design a process that enables you to get that perfect tenant. An ideal tenant screening process qualifies a tenant based on their income level and credit rating, as well as criminal status, employment background, and rental history. You should also seek references from past landlords or employers.
Pre-screen All Prospective Tenants
After a successful advertising campaign, prospective tenants will start reaching out to you. It’s at this point that you should do the screening process. Doing this at this stage will help you weed out candidates that would otherwise not meet your more thorough screening criteria thereby saving both parties valuable time.
The following are some questions that you would ask a prospect during the initial call or email:
- Have you notified your landlord that you’re looking for a new home?
- Will you agree to a background check?
- Have you been evicted before?
- Are you ready to pay the move-in costs?
- Where do you work?
- Do you smoke?
Note that the pre-screening questions must be in line with the Fair Housing Act. If a tenant meets your criteria, continue with the property showing. However, if they don’t, then it’s best to continue looking.
Require Prospects to Fill out a Rental Application
After you’ve done property showing with a select group of tenants, have them fill out a rental application form. A rental application form will help you collect vital information from the tenant. Such information includes:
- Their name and address
- Names and addresses of prior landlords and employers
- Authorization to run credit and criminal backgrounds
- Their social security number
- Conduct an Income Verification
You want to rent to a tenant that can pay their rent without issues. And the only way to know that is to verify whether the income the tenant has stated there is correct.
To do an income verification, call the prospect’s employer and verify the information the tenant has provided on the rental application. Below are examples of questions you should ask their employer to get a good picture of what they earn:
- How long has the tenant been working in your organization?
- Can you confirm that the tenant is earning X amount as income?
- Is the tenant working full-time or part-time?
- Is the tenant a reliable employee?
Generally speaking, only consider tenants making at least 3X the monthly rent amount. For example, if you’re charging a monthly rent amount of $1,000, then only consider tenants making a minimum of $3,000 as monthly income. But of course, employ your best judgment in this regard, as a tenant’s income may not offer a true reflection of how much they are left with after factoring in other living expenses.
Reach Out to Prior Landlords
Unlike a current landlord, prior landlords won’t have any incentive to lie to you. A current landlord, on the other hand, may see an opportunity to get rid of the tenant if they’ve been problematic. A former landlord, however, will be able to paint a more accurate picture of what the tenant was like.
The following are some questions that you should ask prior landlords:
- Was the tenant reliable in paying rent?
- Did they cause disturbance to neighbors or other tenants?
- Did the tenant violate any term of the lease or rental agreement?
- How long did the tenant rent from you?
- Would you rent to the tenant again?
Run the Tenant’s Credit Report
A tenant’s income may not offer a full picture of their financial situation. And this is where a credit report becomes invaluable. Of course, rent to a tenant with a good credit rating. Generally speaking, only consider tenants with a credit rating of at least 670. With credit ratings, the higher the rating the better.
You can get a credit rating report from either one of the major credit reference bureaus, such as Equifax, Experian, or TransUnion.
Analyze a Tenant’s Background Information
A background check will reveal additional details about a tenant other than their employment and credit history. One of the first pieces of information you’ll know is a tenant’s criminal history. Don’t, however, take this as automatic disqualification if it comes up. Look for relevant information and ask yourself:
- Is the conviction about a violent offense? If it is, then that’s a red flag.
- Was it a minor offense? If you’re not sure about the nature of a crime, consult professional legal services.
Note that you cannot reject a tenant’s application simply because of an arrest record. Arrests and convictions are not the same things. Another thing a background check will reveal is the eviction history. If they have a history of evictions, this could pose a potential red flag.
Finding quality tenants requires due diligence. Failing to perform a thorough tenant screening can result in more stress for you as the property owner. It can also hurt your ability to maximize your ROI. Luckily for you, with this guide, finding a great tenant for your Pittsburgh rental property will be a smooth process.
If you need help, DeSantis Property Management is a trusted and proven property management company serving Pittsburgh, PA, and the surrounding areas. Get in touch with us today and learn more about our management services!