Landing the right tenants leads to growth and profit!
Landlords in the Detroit Metro area have one goal in common – renting to great tenants. But why?
A dream tenant will ensure the best possible return on your investment by paying rent on time, caring for your property, notifying you of maintenance issues on time, and renting long-term, among many other things.
But attracting the best tenant isn’t an easy process. You need a strategy that will ensure you are able to weed out potentially difficult tenants from your prospective tenant pool. That’s where an effective tenant screening solution comes in!
At Nelson PM we believe effective tenant screening is a skill all landlords should look to The following is a quick guide to effective tenant screening in Metro Detroit.
Identify the Attributes of a Quality Tenant
As part of getting your property ready to rent, even before you design your tenant screening procedures, you need to consider who you’re looking to attract. The following are some of the attributes that a dream tenant possesses.
- They have a stable job.
- They can afford the rent without issue.
- Have a clean criminal record.
- Have great references from other landlords.
- They are responsible for the property.
Once you know the kind of tenant that you are aiming for, you can begin designing the screening process which ensures you meet your goals.
Create A Targeted Advertisement
Marketing is where the process begins. You need to create an effective rental ad that targets the right kind of tenants. If you do it properly, it should not only save you time on the screening process, but should also enable you attract quality tenants.
Beyond the basics, you’ll want to include certain crucial information on the property’s description section such as:
- Amount of rent: By specifying how much rent you’re charging, you’ll be able to disqualify some prospects right away, saving you valuable screening time.
- Rental features: Let prospects know what they are getting: the number of bedrooms, bathrooms, and even specify the type of property.
- Available amenities: Let prospective tenants know what sets your property apart from the competition. For instance, state whether the property is in a quiet neighborhood, has a yard, or is in close proximity to nightlife and public transportation. Make sure to also take photo's of these amenities.
- Budget information: Let prospects know about any other move-in costs you’re charging apart from the first month’s rent. For instance, a security deposit or a pet fee, or both.
- Important policies: Mention a couple of important policies that your lease may contain. For instance, your pet policy. Do you accept pets? If so, are there any restrictions that you have in place that a tenant might want to know prior to showing interest.
Pre-screening is an important step which can help you notice red flags early on in the process, saving you valuable time down the road. Pre-screening includes asking prospects key questions during initial contact.
This usually happens after your marketing campaign launches, where tenants get in touch to inquire more about the property. Pre-screening also includes meeting prospects in person at the showing.
The following are some important questions you may want to ask prospects during this stage.
- Why are you moving?
- When are you looking to move?
- Does your current landlord know that you’re looking to move out soon?
- Do you have a job and how much are you making a month?
- How many people will be living with you?
- Have you ever been evicted before?
- Will you provide authorization for credit and background checks?
Once a tenant has provided satisfactory answers at the pre-screening stage, you should require them to fill out a rental application form.
Verify the Prospects Information
One of the first things to verify in the rental application form should be where the prospect is working and how much they are making. This will be beneficial in two ways.
For one, it’ll enable you know whether or not the tenant is honest about their income. And two, you’ll be able to know whether their references are being truthful and are telling a consistent story.
Talk with Prior Landlords
Ideally, you should look to contact prior landlords and not the current landlord. To find quality, long term tenants. Why?
Prior landlords have no reason to lie but, the current landlord may be motivated to lie as they may be motivated to get rid of a problem tenant.
The following are some questions you may want to ask prior landlords in order to get to know a prospect better.
- Was the tenant reliable in paying rent?
- Did the tenant cause negligent property damage?
- Did the tenant live amicably with other tenants and neighbors?
- What was the reason behind the tenant leaving?
- Would you rent to the tenant again if given a chance? If not, why?
Run a Credit and Background Check
Running a comprehensive credit and background check on prospects should be able to reveal plenty of valuable information. Including the following.
- Credit score
- Complete account history
- Prior evictions
- Criminal past
- Social security number verification
- National sex offender check
Make the Final Decision
Once you have followed the aforementioned steps, you’ll have all the necessary information to accept or reject a prospect. To accept a prospect, notify them either by calling or emailing them.
But if you’re rejecting them, it may be best to do so writing to avoid a potential lawsuit. Please note that you cannot reject a prospect on the basis of their race, color, nationality, gender, religion, or any other protected class under the Fair Housing Act. That would be discriminatory and is unlawful.
Having an effective tenant screening process is a must-have for any savvy landlord in the Detroit Metro area. It’ll ensure you protect your investment, have a stress-free experience, and above all, maximize your rental income.
If you find this process daunting, Nelson PM can help. We’re a professional and reliable full-service property management company in Metro Detroit.
Whether you’re looking to increase your profitability, grow your investment portfolio, or simply achieve stress-free property management, we can help. Get in touch TODAY to learn more!