Evaluating the renting applications is key in the business of renting apartments.
The renting applications are your tool to use in approving tenants. You did a good job pre-qualifying over the telephone and interviewing the applicant. Now you have to check the information. Is it all true? Not always everything is true. Some people take chances and lie to you. So, you at the minimum have to: - Run a credit report.
The credit report is showing how that applicant takes responsibility for bills and life. The rent bill is the biggest for many. A good tenant credit report should have a score of 600 or more. If no credit, check the potential applicant's (PA's) previous and current employer for work attitude. Self employed and no credit, good luck, it is your risk. Bad credit, a lot of medical collections, good job history, you may consider these renting applications on a case by case. If not so much credit history because most payments are in cash, and there is also some utilities bills collection, watch out. You can say: "Sorry, because the bad credit at this time, your rental application is declined". If you can't say "no" when you have to, you may say that your partner or the owner said "no". The PA will understand. - Check employment with pay stubs, look at Year-to-date amount, call the employer for length of employment if needed.
Work history of less than one year on the current job or 3 or more jobs in the last two years is telling you something. Some portion of the total income must be garnishable in the event the tenancy ends on bad terms and I need to have the means to collect the damages. - Total net income must be at least three times the rent.
- Use a security deposit based on risk factors; one month and half rent is a good target: I use one month rent and I think I made it too affordable.
If the tenant is weighting about 350 pounds and your vacant apartment for rent is at the 2nd floor you may think twice if he/she does not. It is no illegal discrimination for weight.
The key to avoid accusations of illegal discriminations, evaluate all renting applications by the same criteria.
There are "New Resident Checklist" forms for renting applications based on points with financial selection criteria, reliability/ cooperation criteria (how they speak and present themselves), rental stability criteria (rental history).A good tenant is paying always on time, takes care of the apartment, is friendly and comprehends "quiet enjoyment" words. I think I am a risk taker, all entrepreneurs do that. I do not want to make the renting application process too easy, even when competition ads scream "free rent first month" or "no deposit" in our local newspaper. By the way, who is in control of renting in the real estate business? Ultimately, the owner is or should be, in my opinion.
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