The rental environment today demands that landlords, homeowners, and management companies thoroughly review tenant applications before approval. The risk is clearly the greatest for the landlord. Select the wrong applicant, and you could potentially lose a great deal of money if they fail to pay their rent on time, or worse.
Management companies that oversee hundreds of units in apartment building are able to absorb that cost much easier than a homeowner with one single residents. Evictions cost time and money. Here are 3 great reasons to reject an applicant.
It’s a landlords or owners job to require a certain level of income the potential renter must earn based on the rent for the vacant unit. Many of the larger apartment communities are using a figure of 3.5 times the monthly rent. Remember that everyone has other bills that they must pay. These can include car payments, school loans, child support, etc. Verifying income is certainly extremely important, and probably the most important factor when selecting a potential tenant.
Renters may own a previous community or owner money from a lease that went south. These can come in the form of broken leases, evictions, and judgements. Pulling the credit of the applicant should be mandatory. Here you gain access to some of the most important information you will need to make an informed decision. If you spot any of the previous 3 marks on their credit report, you will want to decline the applicant. This basically means they owe money to a previous owner. What is to say they won’t do the same thing to you. We advise that you find another potential customer.
When you pull a credit report you should also get the individual’s overall score. Be on the lookout for a subpar score. These scores can be the result of all sorts of issues. But usually you may see credit card charge-offs, late payments, car repossessions, and other items. It can also be the result of a high amount of unpaid debt. This score tells a story of the repayment ability of a person.
Again the score alone may not dictate approval or acceptance, but it definitely should be considered as part of the overall application.
A vast majority of large apartment complexes have a no tolerance policy for felonies. They also have to consider the other tenants in the community. Anything drug related, or violent convictions are never considered. Many misdemeanors are now affecting approvals as well. There is nothing set in law that forces acceptance or rejection of a potential tenant.
If you are simply renting out a home, then you may not be concerned with a criminal history. However, it must be considered when many people are living in close quarters.
A tenant who pays their rent on time and abides by the term of the lease are certainly the most attractive residents for anyone or any company that oversees residential leases.