Being an “owner” requires one set of responsibilities. But once you decide to rent out your property, you take on a whole new, second set of duties as “landlord.” And they can be tough.
One of the best examples of this is the tenant screening process. It’s a notorious hassle for owners without professional property management experience and resources.
Here’s why: For every tenant applicant you’re considering as an owner handling landlord duties yourself, you MUST….
Verify the applicant’s income:
- Do you know the right numbers to look for?
- Do you know the “annual salary to annual rent ratio” that will ensure your financial protection?
- Do you know what records you can/cannot ask for to verify income?
Run a credit check:
To complete 1 credit check on 1 applicant, you’ve got to….
- Get signed/written permission AND specific information from applicants. (Know what that is?)
- Go through 3 differing processes to pull 3 full credit reports from 3 separate credit unions.
- Pay for each report. (Do you know costs? Do you have a plan to factor them into application fees?)
Get the RIGHT references:
- Do you know which type of references to request?
- Once you get references, do you know what to ask these individuals when you contact them?
- In checking references, do you know what the best predictors of a “positive owner-tenant relationship” are?
- Do you have the experience to know which red flags and green lights to look for?
Know all federal, state, and local fair housing laws (backwards and forwards):
Follow them when completing the above screening steps….
And through the duration of your time as a rental property owner.
Most owners come to realize that doing “landlord work” themselves is time consuming. Then they realize that doing the work WELL—in a way that brings good return on their investment—is a full-time job. That’s when they make the smart decision to hire a property management company.
Let our team be yours! Contact us to find out how we can help.