Investing in rental properties is a great way to earn monthly income and be on your way to financial freedom.
Lets say you just purchased or own a rental property in a nice location in the Reno, Nevada area. The property is desirable after you made some appropriate changes to the property and maybe you have renovated the kitchen and the bathroom. Or you decided to rent out your own home.
You get plenty of applications. What do you do next? How will you screen each tenant? How do you know if you are renting it to the right one? These are all important questions worth asking. In the blog, we are going to talk about how to correctly screen tenants in Reno Nevada.
We provide homeowners, sellers, buyers and investors with the most accurate and up to date information. As a result, we are one of Nevada’s biggest real estate resources. Continue reading so you can learn why screening tenants the right way will help you avoid making any costly mistakes. You can also contact us anytime if you have any question or would like us to screen and manage you rental for you.
Very Important Note. Correctly advertising your rental property is the best way to find the right tenants. The more people you advertise to, the greater the chance you will get the right one. With that being said, we strongly suggest you DO NOT advertise on craigslist.
We came across a lot of horror stories from other people who got a tenant from craigslist. Craigslist if full of scammers who are looking to target rental owners and take advantage of them. Also, a good amount of people who are looking on this website are there because they do not qualify for other rentals for one reason or another.
This is why we never advertise on craigslist. There are plenty of free and more credible websites that will advertise your rental. Although no platform is 100% perfect, you will run into less headaches and will increase you chances of finding the right tenants for your rental.
Also when you advertise, make sure you correctly list what you will or will not allow without violating fair housing laws. For example, pets or no pets, are cats or dogs, income requirements, minimum credit scores, criminal history, do you allow smoking, and other policies. This will cut down on unqualified applicants and save you much needed of time.
With that being said, lets begin…
After you advertise your property for rent, you will need to have prospects fill out an application. This is where you will get the information you will need to screen them. You need to ask the right questions. You will not get the right answers if you do not ask the right questions so this is important to get right.
Request information needed to verify who they are. Good forms of ID are government issued IDs. Examples of government issued IDs are drivers licences, Identification cards, social security cards, passports or Active duty military ID with issued and expiration dates. IDs with pictures are the best options to match it with the tenants. Having numerous forms of identification will help you in case you need to evict and collect unpaid rent . You will also need to check to make sure the IDs are not fake or stolen.
Get a list of their current or previous job history. Be worry of constant job changes or gaps in employment because this would indicate instability which could lead to them not paying rent. You should also call their employer and ask for a vitrifaction letter to confirm their job status. Get their income level and verify this income with pay stubs and other financial statements. A good income ration would be 2.5 to 3 times the monthly rent.
Also ask for previous landlord information for each property they rented from. Call and verify with the landlord. Check to see if they were good renters. By asking if they paid rent on time or damaged the house. Get the address they rented from so you can follow up if needed. Also ask if they have and gaps in rental history, if so why.
Ask the applicants how many people will be living in the property and how many pets they have if you allow them. Get information on all applicants that you are legally able to collect. Every adult should get a separate application to fill out to ask them all the same questions. Verify each one and collect the much needed information. Get information on each pet. For example, breed, size and check if their shots are up to date. Get insurance for each pet if you feel the need to. This will help protect you down the way.
If the potential tenants are unable or unwilling to provided you with necessary information to verify, this could be a big red flag.
As we mentioned above you need to collect as much information as possible like job and landlord references if you want to correctly screen tenants. In addition to verifying their employment, job history and income to make sure they can pay the rent, you will also need to collect personal references.
Getting personal references will allow you to get an idea of what kind of person they are. Ask them tough questions to see if they are able to pay rent or if they have any problems that will prevent or hinder their ability to pay rent. You may be surprised what some people might say. Even the ones closet to them.
Here are some good questions to ask personal references:
- What is your relationship to the applicant?
- How long have you know them?
- What is their work ethic like?
- What type of person are they?
- What are their weaknesses and strengths?
- Do they have any issues that would prevent them from renting long term?
- Anything that would prevent them from paying rent?
- Would you trust them with large forms of money, children or vulnerable individuals?
- Are they good with people?
- Do they have pets?
- Would you hire them?
Good question to ask previous or current landlords:
- What was the address they rented from you?
- When did their lease begin and end?
- What did they pay?
- Does the tenant have current debt with or unpaid bills with you?
- Does the tenant have a history of late payments?
- Did the tenant cause any damage to the property?
- Did the tenant properly clean the property when the left?
- Who was listed on the lease?
- Did the tenant disturb any of the neighbors or cause any issues?
- Did the tenant get their full security deposit when they moved out? If not, why?
- Would you rent to this tenant again?
Good questions to ask employers:
- Is the applicant currently employed with you?
- What is their monthly salary?
- Date of hire?
- Are they full or part-time? Are they contractors for the company?
- Position at the company?
- Work hours?
- Any issues at work?
- Do they get along with coworkers?
If you want to go further into each questions ask for an example for every answer they give. These might be tough, difficult and time consuming for some people to ask, bu the more information you have the better.
Always run a credit check on all you applicants who apply for rent if you wan to correctly screen tenants. This will show you how they generally handle their payments by identifying if they have any late or missed payments, or if they generally pay all their bills on time. Will also show if they own ant past rent or if they owe unpaid child support. It will inform you how much debt they might have and the likelihood they are able to pay their rent.
The higher the credit score the better. Lower scores indicate a higher risk they will not pay rent or be late each month. There are different platforms and methods you can use. They most common credit checks look at information from the three main credit bureaus. Experian, Equifax and TransUnion. When you run a credit check, run it through each credit bureau. Information on on is not always the same. An eviction or debt might only show up on one if it was not reported to the other two.
You will have to get permission from the applicant to run a credit check. There many services you can use that will run each tenants credit for you. If you use a property manager they will take care of this as part of the service they provide you.
You also need to complete a background check to each prospect. Use a service that will find any evictions, criminal records, public records of any past or present judgments against them. This will help let you know what type of person they are and if they could cause issues.
You will also want to run a background check. Make sure the service you use provides rental history to find any evictions, criminal records, and public records for any unreported judgments or other outstanding debt. This will also shed some light on the type of person they are.
Hold interviews with your prospective candidates. You want to ensure that their lifestyle and activities match in with your property’s intended use. You may want to ask the following Questions:
- Do you have any pets? How old are your pets? Are they housebroken?
- Do you plan on getting a roommate in the future?
- What is your typical workday like? Do you work night shifts or odd hours?
- Do you smoke? Do you smoke indoors or outside?
- Do you have any friends or relatives who frequently spend the night in your home?
You do not need to be a private eye to correctly screen tenants. The idea behind screening each applicant is to get a good idea of who they are so you are confident they will pay your rent each month. You want to make sure the tenant you pick not only pays rent on time, but also follow the rules and regulations you put in place.
Make sure you do not skip any steps. Always follow federal and your state’s landlord tenants laws. Do not break any privacy and fair housing laws.
Hire a Property Management Company
It takes time and effort to properly screen each tenant but it is worth it when you decide to rent your house in Reno, Nevada. If you own to many rentals or if you do not want to go through the hassle of screening each applicant, we can do it for you. In addition to evaluating and screening each tenant, we will handle the day to day operations for you.
We help homeowners by providing top property management services at a fair and reasonable price. With no additional fees like other companies. We also give discounts for individuals with more than one renal property.
If you are looking for a property management company in Reno Nevada or have any questions, give us a call today for a free no obligation consultation to see if we are right for you.