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Selecting the Best Tenants for Your Rentals

Finding the best tenants is essential to long-term property success. Although many regulations have been put in place to prevent discrimination, property owners and managers still reserve the right to ensure they choose tenants that will comply with lease agreements. In fact, many property owners and managers have stated that their biggest challenge in real estate rental is their ability to find the right tenant.

Selecting the Best Tenants

Tenant screening

The best way to select quality tenants is to have a consistent method of screening prospective renters. There are many resources available for property managers to verify the information provided to them on applications. But before any background checks are done, a couple of points will help in the selection process. 

First, review the application to make sure it has been completed in its entirety. Any information that is missing, incorrect, or illegible will prevent the application from being processed. 

Next, it’s a good idea to meet with applicants in person. In today’s world, fraud and identity theft are very real concerns. Meeting in person helps property managers verify that applicants are indeed who they say they are. This is also a good opportunity to obtain photo identification, which will help in the verification process. The following are key verification points for property owners and renters:

  • Credit History - A tenant’s credit history will provide valuable information to property managers. Late payments or delinquency will appear on a credit report. Managers can verify whether an applicant has been evicted or involved in a lawsuit.
  • Criminal Record - Running a criminal record check will help inform property owners of any convictions or arrests.
  • Previous Landlords - Obtaining a reference from previous landlords will help determine the quality of the tenant.
  • Rental History - An applicant’s rental history is a good indication of the reliability and consistency of the tenant. Individuals who move around a lot will generally not be good candidates for long-term rental.
  • Employment Verification - Managers can request W2s or financial statements as well as issue a request for employment verification. 

Keeping the Best Tenants

Selecting the best tenants is ineffective if property managers don’t keep those tenants over the long term. Establishing a tenant retention program encourages the best tenants to stick around and minimizes the risk of having to repeat the screening process. 

Developing a strong program for retention requires high-quality service delivered consistently over time. This leads to an increase in the average term for tenants and a decrease in turnover rates. Surveys provide valuable feedback for managers and let tenants know that their needs are being fully considered. More personal touches such as a welcome packet and holiday cards are small details that make a big difference in retaining the best tenants.

Reliable and responsible tenants are well worth the time and expense of the screening process. They increase overall revenue by minimizing the costs of turnovers, payment issues, and even property damage. By setting up a screening process to select the perfect tenants, and establishing effective retention programs, property managers will be developing a rental business that provides premium service to its tenants and owners.

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