Have the potential tenant complete and sign a standard rental application to provide personal and employment information and authorize the landlord to obtain a credit report and background check. Obtain the applicant’s credit report through a credit reporting and tenant screening agency

Do a thorough background check. Call previous owners. They are your best and most honest source of information about your prospective tenant. Current landlords, wanting to get rid of bad tenants may not be the most objective source for you.

* Don’t rush. Credit and background checks take just a few hours to complete.

* Pay special attention to fair housing laws. Many potential tenants know the law. The Internet is a wonderful resource for both renters and landlords. Know what you can say and be careful to stay within those guidelines.

* Never discriminate on the basis of a person’s race, color, national origin, religion, gender, family status, or disability or source of income.

* Check state and local laws to make sure you are complying with all regulations.

* Tenant associations and local rental boards are good sources for compliance questions. If you don’t have time, you may want to turn to professional property management.

You can and should consider the following when setting your criteria:

* Establish a minimum income requirement as a multiple of the rent. We are comfortable with 3 times gross income as a qualifier.

* Credit score: consider a minimum score, a late country minimum, the relationships between income and rent

* Time at work. Many managers consider a minimum of six months.

* Previous tenancy information, especially a conversation with the previous landlord

* Maximum number of occupants allowed. State law may differ from federal law. Know what is allowed in your area.

* Eviction filings – a red flag

* Bankruptcy filings: consider a time frame, maybe a bankruptcy three or more years ago with good income and good payment history is reasonable.

Questions you can ask

* Income: Get two recent pay stubs and apply.

* Self-Employed – Request IRS 1040 and most recent bank statements to verify earnings.

* Are there areas that need clarification? Check the current address.

* How is your overall credit rating? Set a minimum score and stick to it. Be objective to all applicants.

* NSF: Any bad checks?

* Previous evictions?

* Have you ever called the police?

* Credit report? Establish whether previous collections or judgments are okay and determine how long before considering them for your unit. Recent problems are a red flag.

* What did the previous landlord say about the applicant? This is your best source for character references on how they lived among their neighbors and how they left the unit.

Questions to ask previous owners

* Confirm that the prospective tenant lived at that address and confirm the dates.

* Ask if the owner / manager knows why they left.

* Ask if they gave adequate 30-day notice of their intention to leave.

* Was the security deposit returned in full?

* Where 3- or 30-day notices have been posted during the lease

* Where the police ever called due to complaints

* Would you rent to tenants again?

Howard Bell for yourpropertypath.com

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