Tenant screening may be the most important aspect of rental real estate investments. A good tenant pays the rent and stays in the property for as long as possible. You’re also looking for a tenant who takes good care of the property. These things are essential for the right performance of any real estate investment.
At Florida Property Management Services in Fort Lauderdale, we divide tenant screening into three areas; credit and background, proof of income, and character.
Credit and Background
Checking a tenant’s credit and background will show you the ability of the tenant to pay for his or her obligations. It also shows you the willingness to pay responsibly. When you’re measuring the credit score against your requirements, remember that the score is just a number. We have a policy that we rent to tenants with a score of 600 or more. That’s not a set number; we need to go deep into what is affecting the credit score if it’s a little lower than we’d like. There might be a single event that brings down the score, or perhaps it is customary for the tenant to pay late.
Proof of Income
We require the tenants to have a gross monthly income of at least three times the amount of rent. Your income policy also needs to consider the quality of income. Check to see if the tenant has been employed in the same line of business for long time, if the tenant works for a government employer or if there’s a tendency to jump from one employer to another.
When you screen for character, you’re trying to find out if the tenant is someone with a criminal background. If the tenant has been convicted of a felony or a misdemeanor, you’ll need to determine if you want to approve the rental. Set a policy and consider what problems might come with the tenant.
If you have any questions about tenant screening, please contact us at Florida Property Management Services.